We are proud to announce another successful investment.

And we’d like to give you a mobile home park investment model that lays out the moving parts – read on for further details.

Vintage’s principals invested in a 24-lot mobile home park 20 minutes from downtown Tacoma, WA with our operating partner five years ago for $1.6MM.

The park was full at purchase and the ~5% cap rate probably looked high to most prospective investors, but rents were significantly under market and there was opportunity to add a couple of more lots.

Since then net operating income increased substantially (via the addition of new homes and reasonable rent increases), which enabled consistent 8%+ cash-on-cash distributions.

The debt was recently refinanced based on a valuation of $3MM, enabling a full return of investors’ capital.

We see continued upside moving forward and so will keep holding, but if we were to sell at the appraised value, this would represent a net IRR to our investors of >20% and a >2.2x multiple on invested capital over the five-year life of the deal.

This deal is a prime example of why we love this asset class (stable and growing cash flow, which is ideal for long-term holds with periodic refinances), and why focusing on higher-quality markets and partners is so critical.

Attached is a simple model that illustrates the dynamics of this deal:

• MHP model

It’s designed for back of the envelope underwriting vs precision. Hopefully it’s helpful for those of you who like to analyze various scenarios on your own.