1st Park - Small or Big?

1st time MHP investor and part-time at that. I have 5 residential investment properties in Colorado and Texas, have owned my own successful small business and am now a medical device sales rep selling pacemakers and implantable cardio-defibrillators. I am a former Marine officer and pilot and live in Orange County, California.

I’m looking at Parks in Arizona, New Mexico and El Paso, Texas (I know these areas well having lived there). My goal is passive income exceeding $200K within 3 - 5 years. From there, I could become a full-time investor if I wanted.

I recently purchased Steve’s Mobile Home Park Evaluator products, reading everything I can find on this subject, am looking through Loopnet and Mobile Home Park Store.com. I also have broker and real estate contacts in these areas. I believe in the strategies and tactics!

I’m not interested in living in a MHP as an entrepreneur, but would rather find a big park (150 plus site) with established on-site management and regular visits from me. Cap Rates might be smaller, but that’s ok if the cash flows were big enough. Yeah, call me crazy newbie…I know.

It seems that it’s the same amount of work for a small park and a big park in terms of financing and due diligence. So why not go for a bigger deal off the back and try to get a securitized loan, lower operating expenses, increase rents over time?

I would love to hear honest and constructive feedback from the Forum.

Thank you very much.

Scott,

Welcome neighbor (I am from Orange County as well)! With everything that I read on your post I would find a mobile home park that is “turn key” (85% occupied or greater). It sounds like you have a lot going on in your life and a “turn around project”, although very financially rewarding will just burn you out. You will want to look for a MH park with at least 80-100 spaces so that you can hire a strong manager. As you know from your other real estate investments, the manager is the key. If you have a good manager, life is good!

You will probably have more success in New Mexico and Texas for MHP’s that are priced well and you can buy at a 8-10 cap rate. The prices in Arizona for MHP’s are almost as bad as CA… they are just ridiculous!

I would definitely plan on attending Mobile Home Millions V in San Diego (March 2nd - 4th). You will find a lot of like minded investors just like yourself. The networking and education is unparalleled in the industry.

Corey