I would love advice from those with more experience. I have a park under contract in Indiana and am doing due diligence. I live in California.
Here’s the outline:
38 spots (between 2 parks next to each other)
Roughly 28 POH’s in bad shape (many empty) and 10 lots
Roughly 19 occupied spots (mostly POH’s and a couple of lots)
city water/city sewer on a master meter
Roads are paved but in bad shape
Lot Rent: $235
Price: $155K
The owner cannot/will not give the realtor information other than hand written notes and no bank deposit slips. The owner is in an assisted living facility and the park has been neglected.
The bank has confirmed they will give us a loan on the information the owner provides-this is the same bank the owner has a loan. Based on what I’ve read in the forum, we would request owner financing with a small down.
The water/sewer bill runs very high-last month and the previous month it was almost 5000 and the city claims it’s usually 3500. Their plumber says they had a few leaks. Similar parks in the area claim their bill runs around $1900 monthly.
I have not made a trip out and have not put a test ad as I’m struggling. You can see I don’t know alot and may or may not find out more with a trip out there. Does it seem worth the time/money/effort to continue with due diligence or would most of you drop it? I am leaning towards dropping it, even at that price.
Thanks for any advice!
Did I miss where it is? If it is out in the sticks, I would pass. If there is enough population to support filling it I would consider it some more. The price is low but the capital needed to do a turn around is huge. Figure about $150k - $200k outlay to fill the empty lots with used homes. You will get this back over time after you sell them but you need access to that kind of capital to bring them in and you can do them over time, so you may get by by recycling the capital through different homes. I paid $25k to get the rough roads in one of my parks about the size of this one in good enough shape so that I was not embarrassed to be the owner. That water bill is a major problem and could cost you a fortune to fix – or it may be obvious where the problem is and perhaps an easy fix – who knows. And those ratty POHs and soak up a lot of doe before they are put right.
Do all of that and bump up the rents a little and you might have a million dollar property, but your hair will be as gray as mine.
Thanks, Randy. That is a helpful response and I appreciate it. The metro is about 38K . Although my hair is turning gray trying to figure out the rent roll, I decided it was worth it to put a test ad which is coming out tomorrow. If I get a decent response I’ll fly out and take a look.
One of the area park owners told me if this was a ‘hot deal’ another park owner would have picked it up by now and I tend to agree. I was just so excited when I found this I just couldn’t believe my luck, haha! I think I’ll check out how long it’s been on the market.
Thank you, again!
Hi Mobbie,
Just wondering where you ended up on this park. Can you give us an update?
Thanks!