My first Park investment


#1

Hi

I am investing in my first mobile home park. We own different investment properties now and I am excited about the opportunity that mobile home parks have.

The property we are in contract with has about $1000.00 cash flow per month. This after expenses.

The park is 11 acres with 33 space’s and 15 boat storage spaces.

There are seven mobile homes that the park owns. The other six are being getting ready to be rented or hauled off.

Currently there are 10 pad sites rented, 4 boat storage rents and 1 mobile home rented.

It very close to a large river and lake. I am thinking we can do RV spaces or additional pads.

The cost of the park is $205,000. The owner will carry the paper at 8%, but he wants $75,000 down. I have the money, but I am not really excited about putting that much down.

I am thinking about after getting the park full refinacing it and getting my money out it.

A few things I am concerned about is that the nearest town is 1400 population and there is one within one hour 250,000 people.

I am 2,000 miles from the park. I have property manager on a lot of my other properties, but this seems a little different.

The owner is going to stay on and manage the park.

I would appreiate any experienced advice I can get.

Thanks, Rick


#2

Rick,

I would have to agree with everybody on this one. Never have a previous owner stay in the deal after purchase.

I also think this project is too small to be involved 2,000 miles away. You need a property large enough to generate significant money to support a really good manager.

You could maybe structure the deal as a lease option. This would allow the seller to receive $$$ with no tax consequence until you exercise the option. You could give them $25,000 or $30,000 down that includes a very small option payment and the first 12 months of pre-paid rent.

What is the expense ratio on this property?

Corey