Been looking for a park in the upper midwest (ND, SD, MN, IA, WI) for a couple of years.
I have 20 years investment property experience, but the mobile home park business has been a tough nut for me to crack.
I am a buy and hold guy, and am looking for a park that is not on septic, and well, at or under 1MM. Small towns are OK with me.
I have made written offers on 2 parks, one was an off market at an 8 cap that was rejected as they just weren’t ready to sell (I am keeping in touch), and made another offer on a park that was around a 10 cap but we were negiotiable. The sellers rejected the offer and didn’t counter but agent says they are motivated.
BUT with that said it seems parks in this region (and maybe the rest of the US) seem to be hot and have been for a while.
There has been several parks I have come across that go under contract almost immediately. By the time I schedule a drive to check them out to view the agent calls back and says sorry sold.
Probably more venting, but what am I missing? Is this market that hot that parks in small midwest towns of a couple thousand are selling withing a day or two of listing? I mean these are’t big metros or even near big metros were talking rural America.
Buyers are everywhere even small towns and septic and wells. If a property has a 8 cap WHY did you not buy? Had a buyer a month ago on one of our parks placed a contract and plan on closing in August. We threw a number in the air and they said, “FINE”. No price haggling or price in question. Wanting to know if we had other parks and we do but not wanting to sell the CLASSY ONES that will go for really low cap rates. If you have a solid 7 cap park including a RV park we have cash to close in less than 30 days—presently will not buy in a blue state!!
Thank you for the feedback.
I have not done much cold call type marketing. I have relied on MHP brokers and Realtors to bring me deals.
I am just amazed how quickly marginal property sells.
I am a pretty cautious investor who doesn’t want to buy the wrong property that ends up with a huge issue with the property such as infrastructure, or buying a property that has a lot of existing tenant issues (abandoned homes, crime, drugs, etc…). I understand that there can be issues with any investment, I just want to avoid buying someone else headache.
So with that said are most investors just sending out an offer on the property based on cap rate and then dealing with everything in due diligence?
When you are a buyer that closes; brokers will call you about any good deals since they know you will not waste their time. Cap rates less than 7 can still be a great buy and most seller of good parks will receive that. At least 20-35 buyers for each good park for sale, that is why if listed usually a contract will happen in 48 hours and at full price. This is a sellers market!!! Yes, most brokerage companies are cold calling for listings so they can pay their bills and most park owners are tried of the calls and mailings. Just another cycles that will change to parks having no buyer like 2008-09.
Parks are highly desired as a sure form of stable income. Put in Contract FAST, good earnest money, proof of funds, and get due diligence period to verify the purchase. Sellers want to know they have a serious buyer not a tire kicker.
Good luck.
There are also triple net properties as mentioned by another person that will yield +7 cap rates with NO management needed–we have also invested in prime farmland with nice cap rates-- plus just outside growing cites with 500% returns in 12 years—lots of choices. Parks are fine if you buy under value and understand the business or have a mentor. Just bought a very nice park +25% under appraised values from a broker friend.
I am also new to buying MHP. I have over 30 yrs experience in commercial RE & 8 in buying notes secured by SFH. Where is there a list of MHP so I can start cold calling? Is it just a matter of searching appr. districts or county records? Thanks.