oak terrace village manufactured home community...1556 sumner avenue. ... lee & associates and...

OAK TERRACE VILLAGEMANUFACTURED HOME COMMUNITY

FEBRUARY 2018

CONFIDENTIAL EXECUTIVE OFFERING MEMORANDUM

NORTH CHARLESTON, SC 29406

MAXWELL BAKER/404-442-2807/[email protected] ESTERSON/423-483-0492/[email protected]

1556 SUMNER AVENUE

MAXWELL BAKER/404-442-2807/[email protected] ESTERSON/ 423-483-0492/[email protected]

TABLE OF CONTENTSOFFERING OVERVIEW• Welcome Letter

OAK TERRACE VILLAGEMANUFACTURED HOME COMMUNITY • Executive Summary• Key Considerations• Rent Roll• Inventory• Investment Highlights• Property Description / Infrastructure• Financial Overview• Aerial Map• Demographics• Location Map• Rent Comps

ADVISOR BIOS

01

03

02

WELCOME LETTERINVESTMENT OPPORTUNITYWe welcome the opportunity to provide you with our in depth overview of Oak Terrace Village Manufactured Home Community and its position in this current market. We will give you our honest, no holds barred assessment of this 30-unit community so you have a better understanding of how this investment currently performs, its investment potential, and what it takes to get it there.

As leading specialists in the industry, our primary interest is to give you a clear understanding of the driving forces in the current marketplace. Our evaluation is based on verifiable data, market knowledge and proven experience that we feel will serve your best interest at this time.

We invite you to thoroughly review this offering memorandum, If you have further interest, please contact us to discuss any questions you may have, as well as schedule a tour of the property.

GUIDELINES

Offers must be presented in writing and include:

• Price

• Source of capital and relevant experience

• Proposed schedule of due diligence and closing

• Amount of earnest money

• List of contingencies including committee approvals, possible 1031 exchanges, etc.

NOFFERING OVERVIEW | 3MAXWELL BAKER/404-442-2807/[email protected]

GLENN ESTERSON/423-483-0492/[email protected]

PROPERTY ADDRESS: 1556 Sumner AvenueNorth Charleston, SC 29406

PROPERTY TYPE: Manufactured Home Community

TOTAL LOTS: 25 lots, two duplexesand one single family home

VACANT PADS: 0

RENT TO OWN TENANTS: 0

LOT RENT ONLY TENANTS: 0

LOT RENT: $300

ACRES: ±1.69

PRICE PER PAD: $45,000

EXECUTIVE SUMMARY

INVESTMENT OPPORTUNITYLee & Associates and The MHP Broker are pleased to offer the sale of Oak Terrace Village MHC, North Charleston, SC (Charleston MSA). This well-located, stabilized MHC has plenty of upside in a strong market. The park is near all amenities of the downtown Charleston area.

The park has 30 tenants, with 25 MHP lots, two duplexes and a single family home (SFH). There are 25 park-owned homes (POH) that are in good condition comprised of mostly mid-1980s models. The park is 100% occupied and all are POH tenants. There are no vacant lots or homes.

This MHC has city sewer and city water that is sub-metered and direct billed to the tenant. The privately maintained roads are gravel and in average condition as our offering price suggests. The park is NOT in a flood zone.

Oak Terrace Village MHC is being offered as a stabilized investment with a 7.50% CAP on current lot rent only using a 41% expense ratio for the park-owned homes. There is an additional $100,800 of POH rental income that is not included in the CAP rate. We are asking investors for shell value only on the 25 POH, two duplexes and SFH of $6,500 each, well below replacement cost.

We are looking for cash offers. However, bank debt should be available to highly qualified buyers for this deal. At full price, using bank debt(5.5% interest, 20 Year Amortization, 30% down), the overall Cash On Cash Return for the park is ±14.0%. The price per lot is about $45,000 and includes full infrastructure for each lot.

We are asking our investors to submit offers at or above $1.35M (7.50% CAP) for the entire park including POH. The potential of this park, using a 97.5% occupancy and only calculating the current $350 lot rent value and equal consideration for the POH, is $1.46M.

OAK TERRACE VILLAGE MHC | 4MAXWELL BAKER/404-442-2807/[email protected] ESTERSON/423-483-0492/[email protected]

KEY INVESTMENT CONSIDERATIONSOTHER INCOME (Not Capitalized Income)

POH Rents 100,800$ 100,800$ POH Expense 40% -$ (40,320)$

TOTAL OTHER INCOME 100,800$ 60,480$

OPERATING CASH FLOW BEFORE DEBT 188,109$ 149,697$ Interest Rate Amort. Years Down Payment

DEBT SERVICE #1 5.500% 15 30% 92,657$ 92,657$ DEBT SERVICE #2 Bank Debt -$ TOTAL DEBT SERVICE------------------------------------------------------------ 92,657$ 92,657$

CASH FLOW--------------------------------------------------------------------------- 95,452$ 57,040$ PRINCIPAL REDUCTION 41,724$ 41,724$

137,175$ 98,764$

CAP RATE (NOI/PP) - LOT RENT ONLY 6.47% 7.50%COCR (CF/DP) 23.6% 14.1%EXP RATIO (EXP/EGI) 43.7% 41.0%TOTAL RETURN (CF+PRIN / DP) 33.9% 24.4%PRINCIPAL REDUCTION 41,724$ 41,724$ DCR (NOI/DS) 1.60 1.62PRICE PER PAD 45,000$ 45,000$

TOTAL PRE-TAX CASH FLOW

ADVISED PRICING Current OccupancyLOT VALUE 1,189,565$ 7.50% CAPPOH VALUE 156,000$ 1.5 | $6500 GRM / Per POHTOTAL VALUE 1,345,565$

PRO-FORMA VALUE 97.5% OccupiedLOT VALUE 1,304,640$ 7.50% CAP $350 Lot RentPOH VALUE 156,000$ 1.5 | $6500 GRM / Per POHTOTAL VALUE 1,460,640$ 40% Exp Ratio

Income Lot POH240,300$ 139,500$ 100,800$ 120,150$ Gross Expenses - 50% - Includes POH120,150$ NOI - LOT & POH

8.90% CAP Pricing: 1,350,000$

Simple Old School Underwriting

PROPERTY ADDRESS:

# Pads: 30 PPP= $45,000.00 Seller BuyerBased on Purchase Price of List Price: $1,350,000 Current YEAR 1

$ 1,350,000 $ 1,350,000

Base RentPad Rents 139,500$ 139,500$ Vacant Pads at Market Rents 0 Lots / 0 POH -$

Gross Potential Rent Income (GPRI) 139,500$ 139,500$ Reimbursements

Water Billback, Sub-Metered 15,564$ 15,564$ Total Expense Reimbursement 15,564$ 15,564$ GROSS POTENTIAL INCOME (GPI) 155,064$ 155,064$

VACANCY 2.5% Market -$ 3,877$

EFFECTIVE GROSS INCOME (EGI) 155,064$ 151,187$ EXPENSES:

R/E TAX Land 4,561$ 5,701$ R/E TAX POH 2,937$

INSURANCE Liability Liability and property for House and 2 duplexes 5,620$ 2,000$ FLOOD INS Not in Flood Zone

MANAGEMENT PM @ 10% 15,119$ PAYROLL None 5,000$

MAINTENANCE Park Only 5,154$ 5,500$ MAINTENANCE POH 26,384$

WATER Billback, Sub-Metered 13,410$ 8,100$ SEWER Billback, Sub-Metered 8,100$ TRASH Direct Bill Cans

ELECTRICTY Street Lights In Tax 1,111$ 1,200$ ELECTRICTY Other - 2 Story Duplex has one elec meter, rent include power 4,000$ 4,500$ LANDSCAPE Manager (Almost no grass areas) 3,775$ 4,000$ LANDSCAPE Tree Removal - trimmed all trees to the 15' line in 2017

OFFICE SUPPLIES 130$ 250$ LEGAL 750$

LIC / PERMITS 673$ 750$ ROADS Private, gravel avg shape 1,000$

TOTAL EXPENSES 67,755$ 61,970$

NOI---------------------------------------------------------------------------------------- 87,309$ 89,217$

OAK TERRACE CHARLESTON SC

INCOME & EXPENSE REPORT


RENT ROLLUnit Sellers UnPark Name Unit Type Notes Bedrooms Tenant Water Lot Rent Home Rent Rent Annual Rent

1 1 Oak Terrace MHP POH 2 Kenneth Hill 41$ 300$ 350$ 650$ 7,800$ 2 2 Oak Terrace MHP POH 2 Savon Brown & Tanika Baugh 300$ 375$ 675$ 8,100$ 3 3 Oak Terrace MHP POH 1 Saxbe Grant 28$ 300$ 100$ 400$ 4,800$ 4 4 Oak Terrace MHP POH 2 Tim & Judy McCutchinson 39$ 300$ 275$ 575$ 6,900$ 5 5 Oak Terrace MHP POH 2 Glenny Bowers 48$ 300$ 300$ 600$ 7,200$ 6 6 Oak Terrace MHP POH 2 Arminda Cano Figueroa 25$ 300$ 375$ 675$ 8,100$ 7 7 Oak Terrace MHP POH 2 Latasha Browell 61$ 300$ 275$ 575$ 6,900$ 8 8 Oak Terrace MHP POH 2 Shena Scott & Jeremy Johnson 51$ 300$ 375$ 675$ 8,100$ 9 9 Oak Terrace MHP POH 2 Juan Quintero Rodriguez 22$ 300$ 375$ 675$ 8,100$ 10 10 Oak Terrace MHP POH 2 Terrica Gordon 22$ 300$ 425$ 725$ 8,700$ 11 11 Oak Terrace MHP POH 2 Patricia Uren & Louise Breunis 30$ 300$ 300$ 600$ 7,200$ 12 12 Oak Terrace MHP POH 2 Mario Merida 117$ 300$ 400$ 700$ 8,400$ 13 14 Oak Terrace MHP POH 2 Christian Espinoza Ruiz 137$ 300$ 375$ 675$ 8,100$ 14 15 Oak Terrace MHP POH 2 Sor & Abelino Mejia 25$ 300$ 350$ 650$ 7,800$ 15 16 Oak Terrace MHP POH 3 Nyoka Scott -$ 300$ 500$ 800$ 9,600$ 16 17 Oak Terrace MHP POH 2 Doug Williams 21$ 300$ 325$ 625$ 7,500$ 17 18 Oak Terrace MHP POH 1 Nolbert Stamper 40$ 300$ 225$ 525$ 6,300$ 18 19 Oak Terrace MHP POH 2 New Tenant 300$ 375$ 675$ 8,100$ 19 20 Oak Terrace MHP POH 2 Mary Glover 55$ 300$ 250$ 550$ 6,600$ 20 21 Oak Terrace MHP POH 2 Timothy Thomas 33$ 300$ 300$ 600$ 7,200$ 21 22 Oak Terrace MHP POH 3 Sharon Jensen 34$ 300$ 450$ 750$ 9,000$ 22 23 Oak Terrace MHP POH 2 New Tenant 300$ 375$ 675$ 8,100$ 23 24 Oak Terrace MHP POH 2 Jan Ament 22$ 300$ 250$ 550$ 6,600$ 24 25 Oak Terrace MHP POH 2 Jesus Barrera 25$ 300$ 375$ 675$ 8,100$ 25 26 Oak Terrace MHP POH 2 Donta Antonio Howell 59$ 300$ 325$ 625$ 7,500$ 26 B Oak Terrace MHP Duplex Inc. Elec 1 New Tenant 750$ 750$ 9,000$ 27 C Oak Terrace MHP Duplex 2 Jhimy Ramas Ramirez 54$ 700$ ‐$ 700$ 8,400$ 28 D Oak Terrace MHP Duplex 1 Tammy Wicker 39$ 625$ ‐$ 625$ 7,500$ 29 E Oak Terrace MHP Duplex Inc. Elec 3 Reginaldo Figueroa Carrillo 208$ 950$ 950$ 11,400$ 30 House Oak Terrace MHP SFH Hope Martin 61$ 1,100$ 1,100$ 13,200$


INVENTORYAddress Yr Make/Manuf Serial No Column1 Length WidthLot #1 1971 Wedgewood/Elcona Homes E44122CK0181T 44 12Lot #2 1972 Titan/National Homes M311411 60 12Lot #3 1964 Huntington/Burlington Homes H444 42 10Lot #4 1967 Cavalier/Zimmer G1757 51 12Lot #5 1971 Aquarius/National (Ritz) M310332 52 12Lot #6 1971 Nashua/Conchemco M52C2EA19014 52 12Lot #7 1969 Fleetwood/Fleetwood DC9J2510597 48 12Lot #8 1968 Towncraft/Town& Country 554790SCX11 55 12Lot #9 1967 Crescent/Redman (New) 324613 57 12Lot #10 1969 Parkwood/Parkwood 6012M5908 60 12Lot #11 1971 Aquarius/National 9440 60 12Lot #12 1985 Liberty/Liberty 02L23170 70 14Lot #14 1968 Craftmade/Apeco FH603CDR1ZWEA1135 60 12Lot #15 1982 GDEGA/Guerdon GDWGA228208780 50 12Lot #16 1969 Bonita/Walker 1612 60 12Lot #17 1968 New Moon/Redman 328040 48 12Lot #18 1971 Duchess/Republic 24522157 45 12Lot #19 1975 Kirkland/Redman 11325952 52 12Lot #20 1970 Signet/Midland 1504 52 12Lot #21 1963 Marlette/Marlette 6243PRC30646 43 10Lot #22 1971 Capella/Midland 511210318 51 12Lot #23 1970 Stylemar/Republic 7021220 60 12Lot #24 1970 Venture/Wickes Homes V51265129 45 12Lot #25 1969 Taylor/Troy 1765F 47 12Lot #26 1969 Elcona/Elcona Homes 560172 56 12


INVESTMENT HIGHLIGHTS

• Stabilized Park with Motivated Seller

• Charleston MSA

• 7.50% CAP on Lot Rent with 41% Expense Ratio

• Direct Billed City Water and Sewer

• Well-Maintained Homes and Park

• 30 POH - $6,500 Shell Value

• Park could use landscaping improvements

• Homes are older models; some may need renovations

• Lots are small

KNOWN ISSUES


THE OFFERING

PROPERTY ADDRESS: 1556 Sumner AvenueNorth Charleston, SC 29406

COUNTY: Charleston

PARCEL NUMBER: 4731400090

SITE DESCRIPTION

# OF PADS: 25 lots, two duplexesand one single family home

TOTAL LAND AREA: ± 1.69 acres

CURRENT OCCUPANCY: 100%

ZONING: R-1 (Single Family Residential)

MECHANICAL

WATER: City water and city sewerSub-metered and direct billed

ELECTRIC: 100 / 200 AMP

PROPERTY DESCRIPTION

North Charleston, the third largest city in South Carolina and known as the “Hub of the Lowcountry,” drives the state’s economy as the epicenter of commercial development, with a business-friendly environment rich with incentives. Its young, highly skilled workforce attracts diverse industries including aerospace, automotive, aviation, bioscience, defense, renewable energy and information technology.

North Charleston is located only eight miles north of Charleston, a Southeast transportation center which boasts: the Charleston International Airport; 100 motor carriers servicing routes throughout the U.S.; Interstate highways I-26, I-95 and I-526; major rail lines; and the Port of Charleston, one of the east coast’s deepest water ports.

But Charleston County’s most revered feature is its charming quality of life. Listed as one of the best cities in America by Outside Magazine, GQ, Travel + Leisure, and Condé Nast Traveler, this historic mecca attracts residents for its laid-back charming lifestyle, affordable cost of living, moderate climate, seaside recreational activities, numerous museums and cultural events, world-class healthcare facilities, and prestigious colleges and universities.

INFRASTRUCTURE Oak Terrace VillageNumber of Spaces 30Number of Park‐Owned 25Vacant Pads 0Number of Vacant Park‐Owned 0Single‐Wide Homes 24Double‐Wide Homes 0Number of Lot Renters 0Single Family House / Duplex 1 | 2

Road Type GravelFlood Plane NoTopography FlatParking Spaces 1.5/1Mowing Responsibilities LandlordOther Amenities N/A


LOT RENT: $300

PARK-OWNED HOMES: 25

TOTAL PRICE: $1,350,000

DOWN PAYMENT: 30% / $405,000

TOTAL PADS: 25 lots, two duplexesand one single family home

PRICE PER PAD:(WITHOUT LEASE-OPTION HOMES)

$45,000

PARCEL SIZE: ± 1.69 acres

FINANCIAL OVERVIEW


AERIAL


DEMOGRAPHICS1 MILE 3 MILES 5 MILES

POPULATION

2022 PROJECTION 15,809 51,833 129,155

2017 ESTIMATE 13,871 45,944 115,296

2010 CENSUS POPULATION 11,173 38,290 97,512

HOUSEHOLDS

2022 HH PROJECTION 5,995 20,163 49,849

2017 HH ESTIMATE 5,419 18,309 45,380

2010 HH CENSUS 4,284 14,940 37,562

2017 ESTIMATED POPULATION BY RACE

WHITE 54.4% 48.5% 47.1%

BLACK OR AFRICAN AMERICAN 32.1% 39.8% 40.9%

OTHER 13.4% 11.7% 12.0%

INCOME

2017 ESTIMATED AVERAGE HH INCOME $42,464 $44,991 $52,424

2017 ESTIMATED MEDIAN HH INCOME $38,899 $41,348 $46,425

2017 ESTIMATED PER CAPITA INCOME $16,621 $18,084 $21,054

AGE

MEDIAN AGE 36.0 35.5 34.5


LOCATION, SCHOOLS, WALMART & MHP SUPPLY


COMPETITIVE RENT COMPSMSA Lots Lot Rent Water Rent Comp Date

Charleston SC MSA 55 210$ Direct Bill Dec‐17Charleston SC MSA 146 220$ Included Jan‐18Charleston SC MSA 205 275$ Included Dec‐17Charleston SC MSA 250 285$ Included Jan‐18Charleston SC MSA 70 300$ Bill Back Jan‐18Charleston SC MSA 89 300$ Direct Bill Nov‐17Charleston SC MSA ‐ Oak Terrace Village 25 $300 | 650‐800 Direct Bill Jan‐18Charleston SC MSA 80 305$ Dec‐17Charleston SC MSA 80 305$ Dec‐17Charleston SC MSA 60 305$ Dec‐17Charleston SC MSA 120 325$ Direct Bill Jan‐18Charleston SC MSA 204 337$ Bill Back Dec‐17Charleston SC MSA 310 345$ Direct Bill Jan‐18Charleston SC MSA 128 391$ Direct Bill Dec‐17Charleston SC MSA 607 468$ Direct Bill Dec‐17


Maxwell R. Baker joined Lee & Associates in 2014 as a commercial real estate broker specializing in purchasing and sellingmobile home communities in the Southeast. His family has been involved with mobile home parks for more than 15 years,and he has been a part of management, rehabilitation, and disposing mobile home parks since his family purchased theirfirst park. Max is also Founder and President of The MHP Broker offering mobile home park owners and investors brokerageservices, free mobile home park analyses, in-depth market research, and mobile home park financing consultation.

In 2014 and 2015, Max completed approximately 80% of all Georgia manufactured home community transactions andhas also closed transactions in other Southeast states including Tennessee, Alabama, North Carolina, South Carolinaand Florida. Max's core competencies include structuring and negotiating complicated transactions, owner financing,research and outsourcing, and his "deal-making" capabilities.

Max, along with his expert team of researchers, compile and maintain the industryÕs most comprehensive database ofmobile home community data in the Southeast. Max and The MHP Broker are recognized as a trusted advisor in this rapidlygrowing multifamily, affordable housing sector.

¥ Georgia State University - B.A. Real Estate¥ United States Marine Corps

¥ Atlanta Commercial Board of Realtors¥ Real Estate Broker - Georgia¥ Georgia Manufactured Housing Association (GMHA) member¥ Southeast Community Owners (SECO) member

Biography

Education

Memberships & Associations

3500 Lenox RoadSuite 200Atlanta, GA 30326

T [email protected]

Partial Client ListBeal BankColony CapitalMarket Street CapitalAffordable Housing Communities Inc. Capital Square Holdings LLCThe Reach GroupMidland Loan ServicesHartman Wright Group, LLC Affordable Communities Group, LLC

PrincipalMAXWELL BAKER

ADVISOR BIO // MOBILE HOME PARKS

ADVISOR BIO - MAXWELL BAKER

ADVISOR BIOS| 15MAXWELL BAKER/404-442-2807/[email protected] ESTERSON/423-483-0492/[email protected]

Glenn Esterson is a Senior Director with Lee & Associates, specializing in investment grade mobile home communities.During his fifteen years in the commercial real estate business, Mr. Esterson has successfully owned and operated mobilehome parks as well as assisting his clients in the sales, leasing and management of mobile home communities throughoutthe southeastern U.S. markets.

Early in his career, Mr. Esterson was working on apartment sales, condo-conversions and property management. Fromthere, Mr. Esterson transitioned into investment sales of multi-tenanted small business parks throughout the Southeast andmid-Atlantic. He and his team has transacted in nearly every southeastern state and holds multiple real estate licenses.

Mr. Esterson works exclusively with private investors as their primary real estate investment advisor for their acquisition anddisposition needs. Mr. Esterson provides clients with expertise in asset management, portfolio analysis, site selection, leaseadvisory and consulting. Mr. Esterson has executed over 200 sale or lease transactions over his career with a transactionalvolume in excess of $100 million.

¥ 2016-Present Lee & Associates, Atlanta - Senior Director Mobile Home Communities¥ 2013-2016 Marcus & Millichap, National Office & Industrial Properties Group¥ 2003-2013 Esterson Management Solutions, Inc. Ð Founding Member¥ 2001-2005 American Commercial Properties, Director of Multi-Family Investment

¥ Sierra Nevada CollegeBachelor of Arts

Profile

Experience

Education

3500 Lenox RoadSuite 200Atlanta, GA 30326

T 404.442.2825C [email protected]

Senior DirectorGLENN ESTERSON

ADVISOR BIO // MOBILE HOME PARKS

ADVISOR BIO - GLENN ESTERSON

ADVISOR BIOS| 16MAXWELL BAKER/404-442-2807/[email protected] ESTERSON/423-483-0492/[email protected]

The information contained in this Marketing Brochure is proprietary and strictly confidential. It is intended to be reviewed only by the party receiving it from Lee & Associates and should not be made available to any other person or entity without the written consent of Lee & Associates. This Marketing Brochure has been prepared to provide summary, unverified information to prospective purchasers, and to establish only a preliminary level of interest in the subject property. The information contained herein is not a substitute for a thorough due diligence investigation. Lee & Associates has not made any investigation, and makes no warranty or representation, with respect to the income or expenses for the subject property, the future projected financial performance of the property, the size and square footage of the property and improvements, the presence or absence of contaminating substances, PCB’s or asbestos, the compliance with State and Federal regulations, the physical condition of the improvements thereon, or the financial condition or business prospects of any tenant, or any tenant’s plans or intentions to continue its occupancy of the subject property. The information contained in this Marketing Brochure has been obtained from sources we believe to be reliable; however, Lee & Associates has not verified, and will not verify, any of the information contained herein, nor has Lee & Associates conducted any investigation regarding these matters and makes no warranty or representation whatsoever regarding the accuracy or completeness of the information provided. All potential buyers must take appropriate measures to verify all of the information set forth herein.

NON-ENDORSEMENT NOTICELee & Associates is not affiliated with, sponsored by, or endorsed by any commercial tenant or lessee identified in this marketing package. The presence of any corporation’s logo or name is not intended to indicate or imply affiliation with, or sponsorship or endorsement by, said corporation of Lee & Associates, its affiliates or subsidiaries, or any agent, product, service, or commercial listing of Lee & Associates, and is solely included for the purpose of providing tenant lessee information.

ALL PROPERTY SHOWINGS ARE BY APPOINTMENT ONLY. PLEASE CONTACT THE LEE & ASSOCIATES AGENT FOR MORE DETAILS.

EXCLUSIVELY LISTEDBIRMINAAL

MAXWELL BAKER / PRINCIPALPHONE: 404.442.2807 | [email protected] & ASSOCIATES | ATLANTA 3500 LENOX ROAD, SUITE 200 | ATLANTA, GA 30326

oak terrace village manufactured home community...1556 sumner avenue. ... lee & associates and...

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