Going thru DD on a MHP in AL ~20 POH, city water, each home has its own septic.
Purchase is $600k, park grosses $9500/mo. (each MH ~$500/mo.)
Annual expenses are $23k, of which $12k goes to the current property manager.
Things I’d like to change/of concern:
1, Never dealt with septic systems - after perusing thru this forum it seems as long as you maintain and pump once every 2-5 years ur ok?
2. Reducing expenses: Thinking of offering one of the tenants free rent in exchange to be the property manager
3. Reducing expenses: Offering a bit less for current manager to stay on
4. Is it realistic to try to find tenants who would maintain the homes to eliminate prop management?
5. Financing - anyone know of a bank or credit union who would fund this in Alabama?
Are you capitalizing park owned home income? (Mobile Home Rent?) or just Lot/land Rent? The biggest pitfall of new buyers is capitalizing mobile home rent. There’s a ton of posts in this forum as to why this is dangerous, but bottom line, banks do not capitalize it, and neither should you when buying.
How many Park Owned Homes are in this park? If there’s too many, you will be walking into a very management intensive park, so be very aware of that. Experienced owners tend to get rid of all park owned homes, sell them off to tenants, and just rent the land.
Offering free rent to the manager is standard, but 12K expenses of management for a 20 lot park is excessive. Going rate is typically $10 per tenant owned home and $15 per park owned home + free rent. You won’t be able to pay full time employment rate on a park this size, manager is likely gonna have to be somebody in the park who wants to see it improve and sees it as a part time job.
Yes, that is a TOH (Tenant Owned Homes) - they maintain their homes, you provide the land and utilities (where applicable).
Financing will likely kill you, as loans under 1million are very hard to get. My suggestion is to leverage local banks or credit unions, call the single office banks in that town or your local town (if you are from AL) and present the deal to them. You will likely have to call 30 places to find one that will do it. Be also aware that banks almost never finance parks with too many park owned homes (25% or more). You may only be able to buy the deal if the seller carries a note (Seller financing) if there’s too many park owned home units.