Post Edited (02-12-10 12:52)
Lonnie dealing the homes may or may not be a viable option in your dad’s park depending on the financing. If he owns it free and clear or little debt then it might work.
If your dad has owned the park for awhile then he may be one of the best resources for you to learn from. Bear in mind that not everyone who owns rental properties is an expert. Many just go by what “others” have told them and they don’t often get great advice. I find this particularly true when it comes to evictions. In most cases the evictions happen quickly if you follow the rules but I find that many small park owners don’t follow the rules, lose a few cases in court and then go around telling everyone you can’t evict quickly. Bullpucky.
This is a business not a hobby. Approach it like you would any new business. Get some education, training and hands on practice. Take what you can from your dad and do your own research. You may find he is exactly right or you may find ways to tweak his system to make it better.
Places like this website and products like mobile home landlording will be of great value to you. Repairs such as the Mike Scarborough DVD course will help a lot if you are a hands on guy or if you will be using a handyman or contractor and want to make sure they are giving you the best bang for your buck.
Let us know how it turns out.
I should probably say I really do not believe in the concept of a rental mobile home park except in very rare situations. I am happy to hit on the reasons if you want, but I will keep this post more to the point. In almost every case, a rental park is like a flat apartment complex. So really your needing to look at managing and turnover as huge expenses and time commitments. In almost every case, if you convert the park to the residents owning the homes, your NOI will be better. This is not a universal truth, as every park reflects the local economic conditions.
So I would look at the sourounding space rent, reset my community to the high end of that result, then sell the tenants the homes on terms with no money down and payments that bring your gross back to a number close to what they are paying.
So if the space rents in the area were $200 per month, and the home was at $350… I would have them pay $200 for the pad, then $150 for the home and figure out a payment plan that was 2 or 3 years long… depending on what you can get away with… shoot for 3, settle for 2. At this time, if I could I would also sub meter utilities if that has not been done. That will further lower your expenses and add accountability on the utility usage part.
Again, not a universal truth, but in most cases that is your best bet…
For what its worth… a stable space rent only park for me, gets a visit every quarter to every half year… so 2, at the most 4 trips per year… maybe a extra trip to my south Texas park in the middle of the winter to just warm my bones, not because I need to visit…
To Mr. Colella, Mr. Johnson,
Thank you both for your insight and wisdom. I will take heed to the knowledge that you have given myself and to so many others,