county line manufactured home...

COUNTY LINEMANUFACTURED HOME COMMUNITY

SEPTEMBER 2017

CONFIDENTIAL EXECUTIVE OFFERING MEMORANDUM

ROCKY MOUNT, NC 278039042 COUNTY LINE ROAD

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

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

TABLE OF CONTENTSOFFERING OVERVIEW• Welcome Letter

COUNTY LINEMANUFACTURED HOME COMMUNITY • Executive Summary• Key Considerations• Rent Roll• Investment Highlights• Property Description• Financial Overview / Infrastructure• Aerial Map• Rent Comps• Demographics• Location Map• Park Map

ADVISOR BIOS

01

03

02

WELCOME LETTERINVESTMENT OPPORTUNITYWe welcome the opportunity to provide you with our in depth overview of County Line Manufactured Home Community and its position in this current market. We will give you our honest, no holds barred assessment of this 37-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.

OFFERING OVERVIEW | 3MAXWELL BAKER/404-442-2807/[email protected] ESTERSON/423-483-0492/[email protected]

PROPERTY ADDRESS: 9042 County Line RoadRocky Mount, NC 27803

PROPERTY TYPE: Manufactured Home Community

TOTAL LOTS: 37 pads

VACANT PADS: 14

TOTAL POH: 8 POH

LOT RENT: $190 per month

AVERAGE POH RENT: $239 per month plus lot rent ($429 total)

ACRES: ± 7.5

PRICE PER PAD: $9,459.00

EXECUTIVE SUMMARY

INVESTMENT OPPORTUNITYLee & Associates and The MHP Broker are pleased to offer the sale of County Line Manufactured Home Community in Rocky Mount (Edgecombe County), North Carolina.

County Line MHC is offered as a value-add with plenty of upside in a strong market in Rocky Mount MSA. This excellent location is near all amenities along a main artery into Sharpsburg, NC. The park has 37 lots, with 14 lot-rent-only tenants each paying $190 a month. There are 14 vacant lots. Current occupancy is approximately 57%. Current market data suggests that a new effective owner should be able to reach 85% occupancy within two years.

Market lot rent in the area ranges from $195-$245 plus water. County Line MHC has city sewer and city water that is sub-metered and is direct billed to the tenant.

There are 8 park-owned homes (POH), including an office, that are in good condition with an average model year of 1993 (1985 - 2000). The tenant-owned units are in fair condition with the majority of them being 1980s and 1990s models.

The privately maintained roads are gravel and in fair condition, but may need some work as our offering price indicates. The park is NOT in a flood zone.

County Line MHC is being offered as a value-add investment with a 9.50% CAP on current lot rent only using a 34.5% expense ratio plus consideration for the park-owned homes. There is an additional $20,040 of POH rental income this is not included in the CAP rate. We are asking investors for shell value only on the 8 POH of $2,500 each which is below replacement cost. We have secured Bridge Loan Financing for this transaction at approximately 8% interest on an interest only loan with 50% down to stabilize the asset.

The price per lot is approximately $9,500 each and includes full infrastructure for each lot. We are requesting our investors submit offers at or above $350,000 for the entire park including POH. The potential of this park using 85% occupancy, and only calculating the $190 Lot Rent Value, is $525,000.

COUNTY LINE MANUFACTURED HOME COMMUNITY | 4MAXWELL BAKER/404-442-2807/[email protected] ESTERSON/423-483-0492/[email protected]

KEY INVESTMENT CONSIDERATIONSPROPERTY ADDRESS:

# Pads: 37 PPP= $9,459.00 Seller BuyerBased on Purchase Price of List Price: $350,000 Current YEAR 1

Base RentPad Rents Oct‐17 47,880$ 47,880$ Vacant Pads at Market Rents 16 (14 Lots / 2 POH) 31,920$ 31,920$

Gross Potential Rent Income (GPRI) 79,800$ 79,800$ Reimbursements

Water None ‐$ ‐$ Total Expense Reimbursement -$ -$ GROSS POTENTIAL INCOME (GPI) 79,800$ 79,800$

VACANCY 43.24% 31,920$ 31,920$

EFFECTIVE GROSS INCOME (EGI) 47,880$ 47,880$ EXPENSES:

R/E TAX Land 2,984$ 3,730$ INSURANCE Liability 295$ 750$ FLOOD INS Not in Flood Zone -$

MANAGEMENT 4,800$ 4,788$ MAINTENANCE 2,504$ 2,500$ MAINTENANCE POH 2,209$ -$

WATER Direct Bill, City -$ -$ SEWER Direct Bill, County -$ -$ TRASH Dumpsters (New 3 year Contract) 2,400$ 2,750$

ELECTRICTY Street Lights 500$ LANDSCAPE Tenant Responsible -$ 1,500$

TOTAL EXPENSES 15,192$ 16,512$

NOI----------------------------------------------------------------------------------------- 32,688$ 31,362$

County Line MHC - 9042 County Line Road Rocky Mount NC

INCOME & EXPENSE REPORT

OTHER INCOME (Not Capitalized Income)POH Rents 20,040$ 20,040$ POH Expense 50% -$ (10,020)$

TOTAL OTHER INCOME 20,040$ 10,020$

OPERATING CASH FLOW BEFORE DEBT 52,728$ 41,382$ Interest Rate Amort. Years Down Payment

DEBT SERVICE #1 8.000% 0 50% 14,000$ 14,000$ DEBT SERVICE #2 Bridge Loan - Priced For Cash -$ TOTAL DEBT SERVICE------------------------------------------------------------ 14,000$ 14,000$

CASH FLOW--------------------------------------------------------------------------- 38,728$ 27,382$ PRINCIPAL REDUCTION ‐$ ‐$

38,728$ 27,382$

CAP RATE (NOI/PP) 9.34% 9.50%COCR (CF/DP) 22.1% 15.6%EXP RATIO (EXP/EGI) 31.7% 34.5%TOTAL RETURN (CF+PRIN / DP) 22.1% 15.6%PRINCIPAL REDUCTION -$ -$ DCR (NOI/DS) 2.33 2.24PRICE PER PAD 9,459.46$ 9,459.46$

TOTAL PRE-TAX CASH FLOW

ADVISED PRICING Current OccupancyLOT VALUE 330,126$ 9.50% CAPPOH VALUE 20,040$ 1 | 2500 GRM / Per POHTOTAL VALUE 350,166$ 8 POH

PRO-FORMA VALUE 85% OccupiedLOT VALUE 613,275$ 9% CAP $225 Lot RentPOH VALUE 20,040$ 1 | 2500 GRM / Per POHTOTAL VALUE 633,315$ 35% Exp Ratio


RENT ROLL Lot POH INFO Address Owner & Status Lot Rent House Rent Total Rent

A1 1997 Oakw 314 Camland Cir POH ‐ Vacant 190$ 310$ 500$

A2 300 Camland Cir VACANT LOT

A3 290 Camland Cir Lot Rented 190$ 190$

B1 2000 Amer 9060 County Line Rd POH ‐ Rented 190$ 260$ 450$

B10 235 Camland Cir VACANT LOT

B11 1988 Adva 213 Camland Cir POH ‐ Rented 190$ 210$ 400$

B12 1996 Champ 201 Camland Cir POH ‐ Vacant 190$ 260$ 450$


B14 1993 Hort 250 Camland Cir Lot Rented 190$ ‐$ 190$


B16 216 Camland Cir Lot Rented 190$ 190$

B17 196 Camland Cir POH ‐ Rented

B18 1989 Oakw 184 Camland Cir Lot Rented 190$ ‐$ 190$

B2 9058 County Line Rd VACANT LOT

B3 9056 County Line Rd VACANT LOT ‐$ ‐$

B4 9052 County Line Rd Lot Rented 190$ 190$

B5 9050 County Line Rd Lot Rented 190$ 190$

B6 9046 County Line Rd VACANT LOT


B8 261 Camland Cir Lot Rented 190$ 190$

B9 1994 Oakw 247 Camland Cir POH ‐ Rented 190$ 210$ 400$

C1 9038 County Line Rd VACANT LOT

C10 1991 Oakw 111 Camland Cir POH ‐ Rented 190$ 160$ 350$

C11 91 Camland Cir Lot Rented 190$ ‐$ 190$

C12 1988 Clay 75 Camland Cir Lot Rented 190$ ‐$ 190$



C2 1998 Oakw 9034 County Line Rd POH ‐ Rented 190$ 260$ 450$

C3 9032 County Line Rd Lot Rented 190$ 190$

C4 9026 County Line Rd VACANT LOT

C5 9024 County Line Rd Lot Rented 190$ 190$

C6 9022 County Line Rd VACANT LOT ‐$ ‐$

C7 13 Camland Cir VACANT LOT


C9 1985 Oakw 131 Camland Cir POH ‐ Park Office

D1 18 Camland Cir VACANT LOTD2 30 Camland Cir VACANT LOT


INVESTMENT HIGHLIGHTS

• Value-Add MHC with Motivated Seller• 9.5% CAP on Lot Rent with 34.5% Expense Ratio• Direct Billed City Water and Sewer• Large Lots• 8 POH - $2,500 Shell Value• Price Per Lot = $9,459

• Park needs landscaping improvements• Homes are 1990s models; some need renovations• Seller’s Books and Records are limited• Gravel roads• High vacancy• County demographics show negative growth, but

city demographics are strong• Only Bridge Financing available• Actual seller expenses = $15,000 including POH

repairs

KNOWN ISSUES


THE OFFERING

PROPERTY ADDRESS: 9042 County Line Road Rocky Mount, NC 27803

COUNTY: Edgecombe

PARCEL NUMBERS: 3757-00-3496-00

SITE DESCRIPTION

# OF PADS: 37

TOTAL LAND AREA: ± 7.5 acres

POH / LEASE OPTION HOMES: 8 / None

ZONING: N/A

MECHANICAL

WATER: CITY WATER, SUB-METEREDDIRECT BILL TO TENANT

ELECTRIC: 200 AMP

PROPERTY DESCRIPTION


LOT RENT: $190 per month

POH (NOT INCLUDING LOT RENT): $239 per month plus lot rent ($429 total)

TOTAL PRICE: $350,000

DOWN PAYMENT: 50% / $175,000

TOTAL PADS: 37

PRICE PER PAD: $9,459.00

PARCEL SIZE: ± 7.5 ACRES

FINANCIAL OVERVIEW

INFRASTRUCTURE County Line MHP Number of Spaces 37 Number of Park‐Owned 8 Vacant Pads 14 Number of Vacant Park‐Owned 2 Lot Rent Only Tenants 14 Single‐Wide Homes N/A Double‐Wide Homes N/A Number of Lot Renters 14 Homes Used for Storage/Office 1

Road Type Gravel Flood Plane No Topography Flat Parking Spaces 2/1 Mowing Responsibilities Tenant Other Amenities N/A


AERIAL


COMPETITIVE RENT COMPSPHOTO PARK NAME # OF PADS LOT RENT COMP DATE

COUNTY LINE MHCROCKY MOUNT, NC

37 $190 2017

1CONETOE SCHOOL HOUSE TRAILER PARKCONETOE, NC

24 $190 2017

2NABATOFF GOLDIE MHPWILSON, NC

65 $195 2017

3MIDLAKE MOBILE HOME PARKTARBORO, NC

162 $195 2017


COMPETITIVE RENT COMPSPHOTO PARK NAME # OF PADS LOT RENT COMP DATE

4HOUSES MHPLUCAMA, NC

50 $200 2017

5CROSS CREEK MOBILE PARKROCKY MOUNT, NC

265 $200 2017

6RIVER WEST MHPROCKY MOUNT NC

70 $200 2017

7KINGS WAY MHPROCKY MOUNT, NC

209 $245 2017


DEMOGRAPHICS3 MILE 5 MILES 10 MILES

POPULATION

2022 PROJECTION 4,974 20,423 97,073

2017 ESTIMATE 5,214 20,357 98,271

2010 CENSUS POPULATION 5,337 20,887 101,052

HOUSEHOLDS

2022 HH PROJECTION 2,181 8,920 42,516

2017 HH ESTIMATE 2,182 8,456 41,085

2010 HH CENSUS 2,144 8,330 40,536

2017 ESTIMATED POPULATION BY RACE

WHITE 58.3% 42.4% 46.0%

BLACK OR AFRICAN AMERICAN 38.0% 54.0% 48.1%

OTHER 3.7% 3.6% 5.9%

INCOME

2017 ESTIMATED AVERAGE HH INCOME $46,903 $47,783 $57,585

2017 ESTIMATED MEDIAN HH INCOME $34,686 $38,049 $47,344

2017 ESTIMATED PER CAPITA INCOME $19,631 $19,897 $24,164

AGE

MEDIAN AGE 39.1 39.7 40.0


LOCATION, SCHOOLS, WALMART & MHC SUPPLY


PARK MAP

Everett Faircloth Everett

Everett Everett Everett Office Everett Everett

Everett Everett Everett

Owned by Tim EverettIndividually OwnedVacant Lot

201 - B12

9060 - B1

9058 - B2

314 - A1

300 - A2

9032 - C3

Camland Circle

9026 - C4

Camland Circle

9046 - B6

265 - B7

261 - B8

247 - B9

235 - B10

213 - B11

290 - A3

9050 - B5

9052 - B4Ca

mla

nd C

ircle

274 - B13

250 - B14

228 - B15

216 - B16

196 - B17

9056 - B3

30 - D2

18 - D1

49 - C14

184 - B18

149 - C8

131 - C9

13 - C7

111 - C10

91 - C11

75 - C12

COUNTY LINE ROAD

Field - Owned by Billy Eatmon (2.3 acres)

Field - Owned by Eatmon's - multiple tracts Eatmon House

9038 - C1

9034 - C2

9024 - C5

9022 - C6

61 - C13


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| 16MAXWELL 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| 17MAXWELL 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

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