RIVER OAK MOBILE HOME PARK
PURCHASE DATE: January 2015
River Oak Mobile Home Park was purchased out of bankruptcy for $355,000 at a 10% Cap using $150,000 of debt as part of the Capital Stack for the acquisition of nine mobile homes. All nine homes have been renovated and are currently rented at $550. All residents pay for their own utilities.
Additional capital of $115,000 was allocated for other park improvements:
- Replacement/improvement of the six roads serving the park
- Extensive tree trimming
- Office remodel
- New meter box installation
- Other miscellaneous common area improvements
Annualized gross rent at Escrow Closing was $60,000. Current annualized gross rent has now been increased 7x to $420,000. The current exit strategy is to maintain the current income level and begin the marketing effort in June 2017.
NOVEMBER 2017 – UPDATE: Acquired 8 mobile homes in the park over the last 12 months and they are leased at an average rent of $500 per month. Big River Steel will announce by the end of 2017, if they are going to build Phases II, III and IV in Osceola, which has already been approved by the City and State of Arkansas. If chosen to be developed in Osceola, this will be an additional expansion of the exiting $1.3 Billion Phase I. This development will be ongoing for a 3 to 5 year period and would serve to increase permanent job growth to over 1,000 and River Oaks can accommodate up to 80 RV and 5th wheels for the workers, which would increase the Gross Income by approximately $375,000 annually. The website will be updated, once the announcement is made as to the result of Big River Steel’s decision.