I have a 90 lot townhouse subdivision that has all the infrastructure in place- Roads, Sewer, Water, Electrical that is Zone for manufactured homes. These lots are narrow 20’x90’ or 26’x90’. It was designed to be narrow lot town homes but this product does not sell well and build costs are very high. I am considering just putting in the pads. SDC for each would be about $17,000. I am in the units $14,000 per lot. Our local rents are at $500 a month. (Same as a studio apartment). I can build and sell out Townhouse with a profit of about $40,000 a unit if all goes well. (Townhouse are not very popular but housing is getting very expensive). This is located in the better part of town near desirable schools (Across from a new middle school).
I love that you put in numbers. What is the cost and benefit of developing a park from scratch?
Here are some off-the-top of my head MHP numbers. 20’ x 90’ is narrow. If you can get enough setback. You probably cannot – you’ll have to combine some lots (2 double-wides on 60 x 90?)
26 x 90 is still narrow but would fit an 16’-wide or 14’ wide with 5-6 feet of setback (maintaining 10’ laterally between homes). I assume the setback ordinance (20’?) would have to be waived or negotiated directly with the fire marshal and city council. What a pain.
The lots are long – You can get a brand-new 76’ or 80’ 3BR home in for $40k or so. Used-good condition perhaps for half that?
What are 3BR homes rents compared to $500 studio? Assume $100 per extra bedroom as a reasonable estimate. 2-3BR apartments rent $700, MH resident can afford about $700 per month as alternative to local 2-3 BR apartments.
If the home costs $400 per month the lot rent could be $300 per month. That might give you a profit of $150 per month per lot. You’re out the development costs (sorry sucker.) How much would you pay to buy (develop) that park?
Each lot, when filled, is probably worth $40,000 or more in this situation (?), split in equity between the home and the lot. You would be into the home for $40,000 until it’s sold, but sold at that cost it’s a great deal for someone given the price you are selling the townhouse (2x that?). You benefit by the rental income stream but you have to put in the development cost.
So, how much does putting in pads cost? Cement and utilities. $17k per space including or not including roads?
Brandon@Sandell