Converting mobile home park to RV park

mobile home university
1

Local laws have made his MHP no longer financially viable. Flood zone changes along with the age of acceptable homes are the biggest issues. The current owner has moved the remaining few house out. I have the opportunity to purchase it for a very reasonable figure. Because of the flood zone changes an RV park is a perfect fit. My question to the group is

  1. Anyone done this

  2. What plumbing & or electrical changes will be needed at what approx cost?

I understand local regs will play into this. I’m just trying to get an approx number.

Thanks

2

I would be very concerned about this deal on a number of issues including:

  1. An RV park will have greater losses and liability potentially than an RV park in a flood – the homes will actually float and wash away as the mobile homes are at least tied down. In addition, the average RV in the U.S. is around $35,000, while the average mobile home is about $15,000. I would get a handle on the insurance issues with a smart insurance guy like Kurt Kelley at Mobile Insurance.

  2. I doubt that a city that hates mobile homes is going to have any interest in RVs.

  3. No bank is going to finance this deal, and the exit strategy is about zero as it has not record of income.

  4. The time to fill up and get an RV following built up is huge.

  5. Is this property an attractive RV destination, or is this just a way to try and fill up a vacant parcel? RV users today are going to destination RV parks over “overnight” RV parks. What makes this a hot destination?

  6. When you get done taking into account the negative returns while you try to get this off the ground – and the risk of complete failure – I doubt the return levels are attractive enough.

Those would be my initial worries.

3

Hey Frank I needed to wait until i had the park under contract before replying to your comments.

1 my attorney has written a lease that plainly states above there signature that the park owners are not responsible for acts of GOD.

2 the city is thrilled & has approved the park ordinance. It’s was unanimously because of the shortage of RV spaces in our community. Our community is home to 8 plant expansions totaling 38 BILLION DOLLARS. My park will be the closest to the largest of the expansion. It’s a 4 year project.

  1. A local bank has already committed to the deal based on what they believe is the certainty of success.

  2. I suspect with 8000 temporary construction jobs it won’t take more than 90 days to fill up the park. Mt break even is 55% occupancy.

  3. The park is on 265 feet of Louisiana Bayou with a wharf & covered pavillin. It will never be a hit location however with 8000 folks needing a place to Live I’ll play the odds.

  4. Like you I’m a gambler. I think we all are in some form or fashion however I feel pretty good about this bet.

Thanks for pointing out the pitfalls. I’ll keep you informed as to the parks success (or failure).

Again thanks for sharing your thoughts & opinions. You guys are GREAT! I’m own 4 mobile home parks. I’ve used this forum numerous times for advice.

4

Hi Richard - Just curious if you have an update on your park conversion? We are finding ourselves at a similar crossroads with our park. Any regrets? Thanks in advance~