CREOP.com

Investment Overview

This property consists of 44 pads (23 RV sites and 21 Mobile Home sites) located in South Hutchinson, KS. This property offers new ownership a large amount of upside through lot rent increases and infill across the portfolio.

Recent Improvements

Current ownership has upgraded most of the 23 RV sites within the last several years, including nearly $10,000 in plumbing and electrical improvements. All RV lots are set up with 30/50 amp electrical service, water, and sewer. Currently the owners have 6 RV lots under construction.

Additional Features and RV Site Utilities

This property features ARY Mesh Wifi for the RVs which was recently added. The property also features two storm shelters, an office that is under construction, and two stick built homes.
RV sites pay $350/month which includes all of their utilities. Owners pay for electricity up until 900KWs each month. Any excess of 900KWs is billed back to the tenant.
The additional home is a wood-framed 2-bed/1-bath home that rents for $450/month (tenant pays utilities).

Upside Opportunites

This property offers new ownership several options to enhance the performance of the asset and to quickly force appreciation. Currently the owners are not billing back utilities to their RV park tenants, aside from a small bill back on electric. Lot rents have also not been raised in several years, and current rate averages are $30-$50 below market. Increasing lot rents and billing back utilities would significantly decrease the property expense ratios while raising NOI in the short term. Currently the property is operating at roughly 50% occupancy, and a large amount of upside exists in infilling the property. Based on occupancy in similar properties in the area, there is a strong demand for affordable housing in South Hutchinson.

Financial Analysis

All numbers listed in the financial analysis are actuals based on rent collection and expense records provided by current ownership. Year two financials are based on raising lot rents to $275 across the board for mobile home lot rent and raising each of the single family home rents by $200 per month. RV rates were not adjusted for future years. Years 3-10 were based on a 3% lot rent raise across the board, which is likely below levels that could be attained by future ownership. Infill opportunity was not taken into consideration for future income, offering further potential for a new owner wishing to infill the property. We also assume that the new owners would meter the water to bill back to the tenants along with the trash at a recovery rate of 90%.

Adjacent Property Available

The current owners of Betty's LLC also own a single family residence to the West of Betty's North. The sellers are representing themselves on the sale of this home, but prefer to include it with the sale of the property.

Opportunity Zone

South Hutchinson, KS is located within an opportunity zone, offering new ownership the added advantage of lower capital gains on a heavy value add opportunity.

Ordinance Disclosure

The city is meeting in June of 2024 to discuss a new ordinance that would limit the length in which an RV tenant to stay on-site. The city has not enforced the local ordinance, but is looking to only allow short term RV tenants and not "semi-permanent or permanent" RV tenants.

Property Being Sold As-Is

South Hutchinson

South Hutchinson is a city in Reno County, KS with a population of 2,500 residents. The city is a suburb of Hutchinson, KS which has a population of 40,000 residents. Hutchinson, Ks is the county seat of Reno County and is located less than an hour from downtown Wichita.

Subject Property

Betty's MHC and RV park is located one block west of Main St. in South Hutchinson, KS. The property is conveniently located a block from a local bank, Dollar General, and a child care center. The property is also located less than 4 miles from the Kansas State Fair grounds which causes a strong seasonal demand for the property's RV sites.
Nearby industries include a livestock auction yard (borders the park to the north), Morton Salt, Tysons Food Distribution, and Collins Manufacturing.