I’m doing diligence on my first park and am looking for some advice. First, I learned that the park is
in the same town as a state prison and they are 9 miles apart. Should this be a concern for any reason? Second, the park has a commercial building on it that I’m almost certain was at one point an auto repair shop. Should this be a concern regarding a phase 1 environmental? Finally, I spoke briefly to a long time resident of the town who said the town was a “hell hole” and that I should “be careful” before I buy. Thanks in advance for any input.
My RV Park is in a County with 10 state prisons, and we have tenants that work for the prison system. If anything, I consider it one of the backbones of the economy here.
Your city economics, such as rent levels and housing price sales should direct you whether you will have lot rents that are desirable. A test advertisement can help confirm as well.
If you get this far and contract it then yes you will need a Phase 1. Auto repair isn’t really that bad so long as it also wasn’t a gas station in the past. The Phase 1 will dig up any history as well as concerns from surrounding properties. Gas Stations, Dry Cleaners, Lead Smelting and Heavy Industrial are the typical environmental red flag uses. There are others, but that’s an overview.
You should be grateful that the prison is nearby. All of those correctional officers need a place to live and they have a steady state income. The only concern is when doing your market analysis with population. I once made an offer on a park that has over 20% population growth over 10 years, which is great. After peeling back the onion a bit, I discovered that a prison was expanded and the new inmates were considered “locals” for the census, thus the drastic population growth. What looked like a great market was actually depressed.
The whole point of the Phase I is to determine if it is a concern. If the Phase 1 indicates a concern, you will have to go to Phase 2. Many people are afraid of that, but it’s not a big deal. You may spend some money and decide to walk, but that’s the only downside.
A negative perception to your property is not a concern. It is your opportunity. You buy it, fix it up, and it’s worth more. Also, make sure you know your audience. Who is making that comment? Subdivision homeowners? To them almost every MHP is a hell hole.
I never even considered a prison as an economic asset but it makes perfect sense! I read a lot of your posts on here and I really value your opinion. Thanks for the reply.
Thank you so much for the advice. Any idea what to expect for a typical phase 2? I’ve been quoted between 2,000 and 2,500 for phase 1. As far as the town resident, I was able to speak more to her over the phone and it sounds more like she just wants to get out of the smaller Illinois town. We talked for 15 minutes and I wasn’t completely put off. She mentioned a few recent closures of some major retailers but theres a Home Depot and a Super Walmart in town. She mentioned that she recently received a letter which sounded like the park may be in an opportunity zone. Any thoughts? Thanks for the reply!
A prison is a asset as any other business. However you need to be aware that the prison will attract family members of convicts to the area. They are generally very low quality tenants, welfare, drugs, crime etc, and should be avoided.
This comment is the biggest red herring. People VISIT their family members in prison. Very seldom have I ever heard or seen anyone say, “Well since Bobby is doing 10-20 for armed robbery in the state pen, I am going to move to that town.”
These people are not tenants, they are visitors (if that even), and there is no correlation that towns with prisons attract low quality people, with the exception of the inmates.
If you are suggesting that family never move closer to imprisoned family member you are incorrect. Based on my personal experience it is not a red herring at all. I live in a city with multiple prisons and have first hand experience. . It is common practice for families to relocate especially when they are on welfare and the father is serving time. Families with jobs in a community may not relocate closer but those on welfare do if they want to visit their uncle dad in prison.
People on welfare can’t afford to move and usually can’t afford the gas to even visit. Just because you saw it once doesn’t mean it’s a pervasive issue.
This is a circular discussion that serves no purpose.
It may not be a pervasive issue but no harm in landlords being made aware of when screening. Safest policy to avoid applicants on welfare unless they are your target market.
Recognized Environmental Conditions are identified in Phase 1 and are actually tested in Phase 2. There is a Limited Phase 2, which may be more economical that a full Phase 2. Because all conditions are different, the pricing can vary widely. It depends on how many and what types of soil samples you make. Last time I checked, we considered drilling test holes in Phase 2 and I was under the impression it would have been about $500 per bore with about 3 to 5 bores. Of course, the issue we were testing for was very simple. I can imagine a Phase 2 can be much more pricey than that. I would call an environmental consultant and explain that you are considering a former auto repair shop. He should be able to paint some type of picture about environmental condition based on if is is simple car repair, auto scrapyard, fueling station, etc.
bciuchta - I am not sure how long you have been a part of this community, but you would be wise to simply ignore any postings by Greg (a.k.a. Cliff Clavin). Suggesting that the prison “will attract family members of convicts to the area” is just, uh, idiotic.
I own a park in a small town within 3 miles of a state prison, it is by far a positive for my mobile home park. I have at least four great tenants that work at the prison, and others that are indirectly supported by the prison (ancillary local businesses). My greater concern about a prison wouldn’t be from the prison being there, but the prison NOT being there. You should be concerned about the prisons future in the area. A closing or reduction in prison population would likely be a significant negative for the park. If you can, see if there are any plans to reduce the prison population, plans to close the facility, or on the positive side - plans to expand it.
Thanks Mick! I’m new to this community but have been studying Frank and Dave’s business model for over a year. Finally have gotten myself the point where I feel comfortable jumping in. I’m so grateful for this forum and all of it’s experienced members! I’m heading to the Orange County boot camp in March and can’t wait!
mPark has good advice, just a couple additional items from my personal experience.
I had a limited Phase 2 performed several years back on a former gas station site and had 12 holes drilled about 25 feet down to the water table. This cost about 15K at that time. Cost can vary a bit because you’re paying for so many components - an engineer, the drilling equipment, lab tests, and then analysis + reporting based on your state’s regulations. I used an environmental company that subcontracted several of the components.
They are really neat reports but really scary to do during feasibility.