Almost empty park, deal or no deal?


#1

This is a park in the state of LA.

Previously the park was occupied by FEMA trailers, now FEMA moved out it sits almost empty.

Here’s the stats:

2 parks, one with 20 space and the other with 61 space. Both are recently upgraded and developed before Katrina.

Lot rent is 180. This is an area with strong rental demands due to the post katrina constructions waves. A 2bed trailer can bring in about 600 monthly income.

The owner has a 590,000 loan on the 2 parks and he wants 160,000(making the total purchase price 750,000)… The park has no paved streets which makes getting new loan difficult.

Since the park is empty, is he asking too much? He is going to run behind his payments if he doesn’t sell these 2 parks.

BTW, I was previously looking at a park in NC but decided to let go since the owner just don’t seem motivated to sell.


#2

well, Miss Ginger, the thing here is, how are you planning on filling the park(s)? You may very well make his problem YOUR problem. You need a viable strategy for getting units in there to make some income.

Right now, perhaps you can absorb leasing the park(s) for exactly what his payments are, with an option to buy by agreeing to add from cashflow as it becomes available, i.e., you get uniits into the spaces paying rent. i would consider this a strictly owner-financed deal until you get the thing rolling, then you can get a loan and cash him out.

Sure he wants $160K - but for what?

No deal, without the infill strategy. And don’t wing this - have your ducks in a row before committing.


#3

Hi, Greg,

I read Fred’s blog and got the info that you have 130 mobile homes for sale in FL. Maybe I may buy a pack of 20 of those and send them over to LA:-)… I agree with you that I need to have a plan in place if taking over this park. The local markets look good and very few repo nearby(they were all snapped away as soon as they become available). The park is in Hammond, LA (about 40 miles north of New Orleans).


#4

or so. fig 5 bucks a mile from Gainesville, FL. At 20 units we will make you a deal.

Syeve gave you good advise…these near empty or empty Parks take tons of time and $$ to fill up. Maybe check Bo out in TX. His contact info is in resources section!!

Greg


#5

Hi, Greg and Steve,

Well after using Steve case’s 60/30 rule and reading your comments, I decided not to go with this park since it is simply too expensive to buy in the first place. Well, I am learning something new in every deal I pursue. As usual, I found sooo… much support here in this forum. I will keep posting until I found a park:-)…


#6

You should check to see if it has the proper use permits in place and the park is to code. Often fema will quickly set up parks with only a temporary use permit that may or may not qualify for permanent occupancy.

Why did he not purchase the trailers?


#7

Good postings. Kera brought up a good point - why the seller didn’t bring trailers, and also to check permit. The parks are too much work, need a lot of homes and capital. You shouldn’t pay the seller that much $$. No deal.

As far as lender, what criterias are they looking for(I will list some)?

  • 80% or more full

  • paved road

  • have books

Post Edited (09-15-07 13:17)