MHP in North Carolina for Sale


#1

Author: Tim

All,

I have a 45 lot 11 + acre park under contract in North Carolina in which I am looking for a partner or to assign to someone.

The park is defunct, the owner built it in 1985 and got distracted in the late 90s and let things go.

Licenses and permits have been kept up & infrastructure is there.

Here are the details:

35 current lots on septic

Community water - park pays

200 amp service to all lots.

Lot size is more than adequate for 14 X 80’ trailers and double wides as well.

10 of the lots need septic tanks.

Tenants pay electric.

There are another 7 spots available for expansion.

Area lots rents are $200 per month.

Estimate expenses at 35 to 37%

Cash flow per month 9,000 (45 lots rentals)

Annual is 108,000

NOI @35% $70,200 excluding future notes on mobile home rentals.

Using the acid test from Mobile Home University here is what we have.

3 * 12000 36,000

42 * 6000 252,0000

Total $288,000

Estimate $40,000 for 10 septic and misc improvements

Net $244,000

Owner wants $350,000k but I negotiated terms of $150,00 down at closing

and the balance on a balloon payment in 36 months at 5% interest only.

That will give time to build the park up and finance out in 18 to 24 months.

This makes for a doable deal.

I tried for an August closing date but seller needs to close in 30 days (divorce deal).

I need to call back seller tomorrow as far as yes or no on this.

Anyone interested give me call (843) 670-8466.

tdorst@yahoo.com

For non-local partners - I would be willing to take care of the general management of the park if needed.


#2

Not sure where this park might be located in NC but a few things to look out for.

45 homes on septic in 11 acres is a bit scary. Now bear in mind that in my area (the mountains of western NC) it is common that some or a good portion of the land may not be useable.

The 10 that need septics may fall (but not certain) under the repair field requirements such as we face, but again I cannot be certain, just want you to be on the look out. The repair field requirements mean we need to have an equal amount of vacant land to the field itself for any future repair. This eats up good land quick. Remember, non-usuable land does not count.

Both Scott and I have owned parks that have had lots taken from us due to failed septic systems and no repair room. I was fortunate that mine was eliminated before I bought. Losing lots is a huge hit to your bottom line and the value of your park.

Then there are the costs of adding the 10 septics and new homes plus the 7 that needed to be developed (I am assuming no electric or water there yet). Let’s use easy numbers here. Let’s say you buy decent repo homes and after move and setup you have $15k. One cannot rely on homeowners to fill these lots. In most cases we have to do this ourselves. 10 lots will run another $150k in addition to the $150k cash you have agreed to put down at closing. You still have the septics and lets say this runs $5k each for round numbers. Add another $25k for the 10 homes, assuming 2 homes are still allowed per unit (if not your land loss is going to grow quickly). Then let’s add the 7 lots at say $35k for developing and septics and now we add the $15k per home for move and setup we get another $105k.

So in addition to the $150k cash at close we are looking at approx.

Just a few heads up to consider.

$150k for 10 homes

$25k septics for the 10 lots

$35k for delelop the 7 lots

$105k for the 7 repo homes

runs you about another $315k (most of which will likely need to be cash), almost what you are paying for the park. I don’t mean to say this is a deal killer or a killer deal, that is up to each investor to decide. I just want everyone to consider what these deals entail. My numbers may differ from yours but it gives some perspective.

Tony


#3

How much is CURRENT income? How many lots are occupied?


#4

Here is the REAL acid test using numbers you supplied in an email:

2 rented lots @200.00 a month x 60= 24000.00

1 possible lonnie deal trailer. 3000.00

32 lots (considering repo availibility) 64000.00

Remaining lots 0.00

Total MHP value 91000.00

Perhaps the property is worth more as vacant land.