Speaking with the owner of a few parks that are being sold off due to dissolving of a partnership that went sour. Here is the park I am interested in:
14 park owned homes all needing rehab from 500-2000k.
Current occupency is 0%
The kicker for me is: small town of 2,500 and not too close to much else. Worry is ability to fill homes once rehabbed.
Direct billed city utilities set up.
Offer price is 29k and can probably work down to 25.
Other mhp in town charges 350 lot rent.
Unusual deal and I am out of state. However, I am young and able to work anywhere and could turn this into a great cash return.
I greatly appreciate everyones feedback.
Cameron : )
There are a lot of risks on this and need a strong desire to clean up a mess…
Confirm several things:
If the City has zoning and this “Park” is grandfathered - does the City have ordinances that would sunset the usage (e.g. usage must revert to single family). Not likely in a small town, but sometimes, check with the City Manager;
What is the local economy like, such as rents for a 3/2, and why is the Park 0% occupancy? If single family homes sells for 40K then your ability to have a good rent / lot rent is limited and should run away, but the other MHP having $350 lot rent is promising if it’s full;
Assuming economics fit your criteria you still need to run a very strong test ad to make sure you don’t have to sit on a home for 6 months to rent it to a bum. Craigslist, Facebook, newspapers, bandit signs etc to get comfortable that you will get enough calls in a week to fill up this park;
How are you going to do all of this work out of state? Have a plan to get some trusted contractors and a good Manager in place to help you with the daily rigamarole.
Finding reliable labor in ultra small towns is almost a form of art, put a lot of emphasis on finding the right crew(s) to partner with you - rates should be lower in towns like this.
After all of the above is confirmed you still need to do your diligence on the state of all the old infrastructure (e.g. sewer, water lines, power, gas, etc) to make sure the capital investment there is understood.
I have done several land home deals in ultra small towns without a metro and they are tough. I still do them, but when done in towns with a greater metro < 30 minutes they do exponentially better.
FYI, I am passing on this deal and happy to share the seller’s contact info w/ anyone interested.
Does not appear to be an issue.
2 years ago, the occ was 100%. The most information seller was able to provide: mismanagement and shady biz partner caused people to move out. In other words, this question was unresolved. Homes actually average 100k however.
This is the reason I dropped the prospect. Zero response from test ads.
Now looking at another small park-18 units. They are currently all rentals and the owner seems to have held pride in his ownership and remodeled all the units.
The main issue I have here is: Most of the 1,2 and 3 bedroom homes are all 12ft wide homes. I WOULD continue renting the units due to their great condition, rental income, and long term tenants. Property cash flows nicely…
Wondering if anyone has constructive criticism on keeping very small units as rentals? Obviously are less attractive commodity than larger units. Any relevant experience selling or renting small units?