1031 investment


#1

We are looking to spend like 400K-450K purchase price on a mobile home park. It’s an unfortunate situation since we wanted to combine more than one sale to buy a park, but that isn 't going to happen until next year. With this kind of money, we can’t buy a park in Southern California (at least not one that is making money—more like rehab projects).

Where would you recommend buying? We have invested before in Texas and might consider that area. We have a prejudice in favor of the sunbelt, i suppose. But we don’t really want a turnaround project that far from home. Maybe this is a bad idea and we should invest in an SFR instead. But we wanted to get our feet wet in terms of buying an MHP. The problem is that a park that is so small won’t come with a manager. And it’s probably unwise to try out of state investment without a manager. What do you thinK?

We don’t want to invest at this point in a non performing asset. Right now we are rehabbing an office building and a retail center—both of which require full time commitments. Any feedback appreciated.

Perhaps we should simply NOT invest in a MHP at this point. What we were thinking about doing was buying a smaller park. But perhaps this is more trouble than it’s worth.

Post Edited (08-15-07 02:55)


#2

but why not leverage this 500K into a real nice Park with great terms and down? Or better yet a L/O that allows you a superior return on this money?.

You will not own it outright, but yield should be great and there should be margin to hire good management…a few empties wouldn’t hurt either.

I like the Carolinas, Georgia, and FL for Parks and have looked at a bunch.

Good luck in your hunt, maybe come to MOM in November…there will be a speaker there that owns 5500 spaces in NC and SC and has brought in over 700 homes in the last 9 years!!

Greg


#3

I have had some luck with smaller parks outside of California.

(not at all to disagree with Greg’s advice above about bigger parks)

The manager thing scared me alot at first. But usually there is someone

who lives in the park already that is adept at collecting rents, managing

maintenance etc. It’s just that in a small park, there is less to do, so

you offer them 1/2 of the rent, or free rent, or whatever applies.

In one case I bought a small park I really liked in Oklahoma, but it did

not have a manager. I bought it anyway, figuring I could find someone.

After a couple of weeks of stress, and having tried local realtors, a disabled

nurse (who would have been great but needed a full time paying job),

the former owner hooked me up with a local sheriff, who wanted to manage it with his wife. I don’t think there will be too many meth addicts

filling out an application with the sheriff, do you?

If someone is late on the rent, he shows up (often in uniform) and they

pay.

So many things kind of work out and happen on the good side.

Rick