The more I research and talk to brokers the more I realize partnering or owner financing (rare) is your way to owning a mobile home park. Unless you’re flush with cash. People make it seem easy and that you should “go big” when you need to put down 20%-50% of the purchase price. I have funds but I dont have $500k of funds. Why isn’t partnering the first topic of discussion and the main topic of conversation? How did you buy your first park and how big was it? How did you scale? How are you vetting partnerships?
Hi hmontag, what is your search criteria - number of lots, general location. I attended the bootcamp, but am otherwise new to the industry. Would consider partnering up.
Owner financing is definitely ideal. Buying a park is and it isn’t easy - there are many variables. If the park pencils and cash flows, getting a loan shouldn’t be a problem - but getting a loan under $1M could be a problem - I don’t know. The amount of money you have will, for the most part, dictate how big of a park you can get - just know that some of your cash needs to go towards loan fees, inspections and reserves… and to scale, you should have cash to fill some empty lots with homes, fix poh’s that are vacant, evict and replace a few bad eggs and take care of a few things that will make the park a much better place for your tenants to live.
If you’re working with a broker you’ll need to be on your game and be ready to move fast. There are a lot of seasoned buyers that you will be competing with.
My first park was 125 spaces, 86 occupied, purchase price of $1.75M, seller finance, I had a partner (very big player in our niche - gave me comfort going into the deal). We sold it and I’m closing on my next park where I don’t have a partner. There are a lot of Partnership topics on this forum - ask around and find someone who is like minded with similar investment goals. The bootcamp is a good place to meet a partner - upon my suggestion a good friend of mine went to it, met a guy and they bought a listed park together.
Thanks and thats is exactly what I said. You had a partner… This is a much bigger component than spoken about. It is the ultimate topic. Even before you find a property. If you havent built that network you better have a lot of cash or a partnership.
The search criteria is profit from the P&L. Its all about the numbers. I would rather it be within 2 hours from me but thats not essential either. Send me a DM.
Hmmm, when you find an answer to that question I’d like to know too.
Im looking in fl. Good price and return
Seems like a bit of a rhetorical question with some frustration thrown into it, so I will provide my opinion which is that everyone has an opinion and a different set of circumstances. Some like big parks, some like to get their feet wet on small parks. Others like anything in between. Some of us have side jobs making $50 thousand per year yet other have side jobs making over $1 million per year. Some investors are funds with over $10 million in them. Because of this, partnering or not is a personal decision.
When partnering at a small level, your first avenue is typically friends and family, aka, people who trust you. Once you have a track record and experience, you can branch out and take other people’s money.
We have never achieved seller financing, and while doable, it is rare. In the times I have seen it offered, it was because the property was overpriced thus requiring a seller note. In the few times I have asked, I was bluntly told “cash only.” We are competing with institutional investors that pay cash and finance later. To beat them, you have to offer something more - which is usually more cash than they are offering. That means if you are expecting to buy at a 10% cap rate, you will not beat other the other offerors. Your best hope is to find an unlisted deal that is not being competed.
Not sure how much cash you have, but we know it is not $500k. If you have $250k, you can buy a park for $1,000,000 without partnering. That would be a nice first investment. If you can get $250k from a friend, you can buy a park for $2,000,000, which is even better. If you find a nice deal and lack the cash, please reach out. We would consider a partnership.
Yes… Frustrating indeed. Again you have confirmed me sinopsis. I will let you know what I find and see what we can do to make it benefit us.