Newbie taking the plunge...Oregon park, resources and advise please

mobile home university
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I’m currently in escrow on a small (20 unit) Oregon park and am looking for any state specific advise and vendors /lenders (plumbers/electricians/handyman/property managers).

I’ve been focused on flipping residential real estate in California for the past 10 years and have an extensive construction (licensed GC) background as well, but am new to the commercial side. Frank & Dave’s boot camp was very helpful in getting my feet wet, and I plan to follow their Due Diligence manual to the T, but am also hoping to get some other real world advice from the West Coast park owners.

Here are a few of the points I am already aware of:

GOOD-

  • City water / city sewer

  • Underground electrical

  • Located in a large metro

  • 2 bed apartments in the area go for 2.5x current lot rent

  • Strong rental demand based on test ads (mostly RV owners…thoughts??)

BAD-

  • Previous owner went into foreclosure and heavily neglected the property

  • Currently property manager company is 60 miles from park and is mismanaging the park (rents are often 60-90 days late according to rent roll)

  • Phone call with City advised that multiple building code violations exist and that electrical pedestals will need to be replaced/upgraded

  • Current expenses are 50% (sub-metering water should significantly help this)

Any thoughts or referrals would be greatly appreciated.

David

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Im in western oregon.

Feel free to give me a call

503.734.7400

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@Davie

Hi Davie,

In small parks, a 50% expense ratio is pretty normal. The standard expense ratio that we see is 43%, but with small parks the few fixed costs (permits, memberships, travel, roto-rooter) aren’t spread around many homes. 50%+ expense ratio is possible in smaller, well-managed parks.

The only other thing that comes to mind with your park is to make sure you don’t overpay. A lot of people right now are so hot for their first park that they overpay a little bit just to make the deal happen. We’re at the top of the market cycle, and just had the first uptick in foreclosures in many years. I would be especially cautious right now and make sure that both you AND the seller are getting a good deal.

If you’d like any help further evaluating the park let me know, I can email you a park valuation spreadsheet that we use or send you our quick and dirty formula that is similar to Franks but a little more conservative. Best of luck. Will