MESA ROYALE MOBILE HOME PARK
PURCHASE DATE: August, 2015
Mesa Royale Mobile Home Park was purchased for $1,100,000 all cash. Additional capital of $200,000 was raised to demolish and remove 31 vacant homes, to clean-up, and to perform other requirements mandated by the city of Mesa via a compliance agreement with the city for the safety of the existing residents. The number of mobile homes was then reduced from 120 to 89. Subsequent to completing this acquisition, an additional three lots adjacent to Mesa Royale containing two rental houses were acquired for $133,000. This acquisition provides a symmetry to the park, which enhances the value of the aggregate parcels.
The park has maintained good cash throughout this process and has consistently provided investors an 11% annualized cash flow since the acquisition in August, 2015. The primary profit/exit strategy has been to take advantage of its location within the growth corridor of Mesa (new Light Rail service opened in March) and proximity to Mesa’s CBD. Executing the repurposing to an end user, which in this case is a multi-family developer, will achieve targeted annualized returns in the 23% – 25% to the investors. The property is currently being marketed for sale at $2,830,000. Negotiations are ongoing with two tax credit developers with a projected sale date in the 2nd quarter 2018.
NOVEMBER 2017 – Update: Since acquisition investors have been averaging a 12% + return on their money. Mesa is currently in escrow to be sold at a purchase price which is 65% higher than the combined acquisition price and all CAP EX expenditures.
SOLD January 2018 for $2,375,000 for 19.2% annual return to Investor for a 31 month hold period.