Upgrading Park electrical Infrastructure


#1

Hi all,

My question is about a park located in Kansas that I am purchasing. It is a small park with decent metro, good exit strategy, but currently is terribly performing due to non-existent management and collections. The biggest issue though is that the infrastructure for the electrical system is 60% 70 amp systems. It seems that most homes will do fine with 100 amp systems, and from what I’m quoted its about $750 more per site to upgrade to 200 amp rather than 100 amp. Would it be wiser to upgrade straight from the 70 amp to 200 amp system from a resale and future-proof perspective, or save the money and upgrade to the 100 amp service if that will suffice?

Thanks,

Adam


#2

Replace to match the unit you intend to put in the spot if you replace an existing unit. If you have Gas available most will only need 100 amp.


#3

@adr1 , as per your question:

  • “Would it be wiser to upgrade straight from the 70 amp to 200 amp system from a resale and future-proof perspective, or save the money and upgrade to the 100 amp service if that will suffice?”

My advice:

  • “Upgrade directly to 200 amp”

We have the following:

  • Turn-Around Mobile Home Park
  • Southeast
  • 65 Lots Total
  • Overhead Electrical Lines with Power Poles & Breakers: 200 Amp Breakers & 100 Amp Breakers
  • Gas Lines
  • Older Mobile Homes Using Gas: 4 TOHs
  • Purchased 4 Years Ago: 27 Lots Filled - (20 TOHs & 7 POHs )
  • Today: 51 Lots Filled - (41 TOHs & 9 POHs & 1 Cell Tower Access)

Some of the Breakers were fine…200 Amps.

Some of the Breakers were fine…at the moment…100 Amps.

Example for an Existing, Older, Small, Gas Mobile Home with a Window Air Conditioner/Heater…100 Amps:

  • For the above (Older, Small, Gas Mobile Home - 100 Amps) we had 2 different Tenants live there with no problems. The problem arose when the 3rd Tenant decided to connect their Dryer. The Dryer was the deciding factor between the 100 Amps Breaker working and not working. The Dryer connection was there all along. However, it was only when the third Tenant decided to use a Dryer that the 100 Amps was not enough.

IF the Vacant Lot has an existing 100 Amp Breaker, we replace it with a New, 200 Amp Breaker after the Mobile Home is moved in (easier to place the Power Pole once the Mobile Home is in place).

Thankfully, we have an Electrical Contractor who is able to install 200 Amp Fully Dressed Power Poles (with Breaker and Copper Ground Rods ) for $550.

Over the past rolling Calendar Year we have had 15 Individuals pay to move their Mobile Homes to our Mobile Home Park.

Thus, we have used our Electrical Contractor quite a bit over the past rolling Calendar Year.

The cost between a 200 Amp Breaker and a 100 Amp Breaker is probably very negligible (our Electrical Contractor will not even think about installing a 100 Amp Breaker for our MHP).

Definitely, upgrade to the 200 Amp Breaker for you, your Tenants and for the Future MHP Owners.

We wish you the very best!


#4

I have installed 200AMP systems in my park because I don’t intend to have to go back and upgrade that service pole again for at least 10-15 years hopefully. Why pay for it twice and incur future higher costs and permit hassles? “Do it once and do it right” is how I look at it.


#5

Kristin, Real interesting profile of your park. My comment is off-topic, I hope you don’t mind.

You said that “Over the past rolling Calendar Year we have had 15 Individuals pay to move their Mobile Homes to our Mobile Home Park”

One of the arguments for raising rents is that tenants will just pay the increased rent because it’s too expensive to move their mobile home. How did you manage to accomplish this unique feat?


#6

Are you upgrading the entire pole for that level of power or just putting in a larger breaker? When I upgrade from 100AMP pole service to 200AMP pole service it is a complete installation including a new pole, conduit, wiring and box upgrade, and the price difference is not huge but not something you wouldn’t notice.


#7

@Jsmith , as per your question:

  • “Are you upgrading the entire pole for that level of power or just putting in a larger breaker?”

We upgrade everything.

Our Electrical Contractor installs everything new.

You are correct that the “price difference is not huge” so it is always good to get it all new :slightly_smiling_face:


#8

@Mohawk , as per your question:

  • “One of the arguments for raising rents is that tenants will just pay the increased rent because it’s too expensive to move their mobile home. How did you manage to accomplish this unique feat?”

That is a great question…one that we ponder a lot.

The results of which we are very thankful for.

Possible reasons why or why not:

  • Advertising: No. We actually do not actively advertise. We have a nice sign at the front of the Park, but that is the extent of advertising. Originally, we advertised with Craigslist (primarily for POHs), but not in the past couple of years.
  • 3 Rail, White Decorative Fence: Yes. For the past 3ish years Frank has toured this MHP with Boot Camp. Every year Frank said that we needed a Decorative Fence. (Actually, Frank created a “Pimp My Park” slideshow for our MHP…one of which was a Decorative Fence.) We got a Decorative Fence and the Mobile Home Move In Boom Started. A coincidence? Maybe…maybe not. Maybe no one knew that it was a Mobile Home Park as there is a large green space (1.5 acres) at the front and now the Decorative Fence helps to define the Park.
  • Referral Fees: We give $100 Referral Checks to anyone who Refers our MHP and the Owner moves their Mobile Home to our MHP.
  • 2 Free Months Lot Rent: We give 2 Free Months Lot Rent to anyone who pays to Move their Mobile Home to our Mobile Home Park.
  • Older Mobile Homes: We accept older Mobile Homes which other MHPs do not accept.
  • Allow Renovations: We allow people to do major renovations on their Mobile Homes while in our MHP.
  • Great Location: We are in a great location in the middle of a Tri-County area near an Interstate.
  • Improved Economy: We have a lot of tradesmen who live in our MHP. Our Tri-County area is booming with construction. Thus, our Tenants have good and steady pay.
  • Low Lot Rent: We have owned this MHP for 4 years. Two years ago we increased the Lot Rent for the first time. Next month we will increase the Lot Rent for the second time. However, we will still be under market. We price both our Lot Rents and POHs under market. We would much rather have consistent, lower, long-term rents than shorter, higher rents with more turnover.
  • Low Supply: There is a low supply of Mobile Home Parks in the area as current MHPs get grabbed up for re-development.
  • Wonderful Greeter: We have a wonderful, retired nurse as our Greeter who loves our Tenants.
  • Help With Process Of Moving A Mobile Home: Moving a Mobile Home is not necessarily an “easy” process. We are willing to help them with the process and with encouraging the Mobile Home Movers (as sometimes the Movers need some encouragement).
  • Word Of Mouth: Maybe we have earned some “Street Cred” that we care about our Tenants and are not just out to make a buck. Why yes…bucks help to feed our very hungry 3 boys, so we like bucks. However, we take a 2 prong approach to our Business Plan:
    1.) Make money to take care of our family
    2.) Provide affordable housing for hard-working individuals

Initially, four years ago when we purchased this Turn-Around MHP, we were convinced that we would have to finance and fill all the empty Mobile Home Lots.

During the past 4 years we have purchased and moved in 5 used, Mobile Homes. We renovated all of these Mobile Homes and are currently renting 4 of them (3 Bedrooms / 2 Bathrooms). The 5th Mobile Home was a great deal but only had 2 Bedrooms / 1 Bathroom. After renting the 5th Mobile Home for several years we just sold it.

During the past 4 years we considered the “CASH” Program. However, I am VERY conservative, so I did not feel comfortable taking on the debt of others. I am still concerned about the ramifications of an exit strategy with the “CASH” Program as I would NOT personally purchase another Mobile Home Park that had “CASH” Debt.

I am sorry, but I really do not know what the secret formula is concerning having others move in their Mobile Homes.

Perhaps it is a combination of the above. Perhaps it is just one of the above.

Whatever it is we are very thankful for all the blessings.

We wish you the very best!


#9

Thank you for taking the time to write such an in-depth response. You seem to have a good long-term management strategy. I’m sure you’ll reap the benefits for quite a while.


#10

@Kristin don’t want to steal the thread but lots of great comments.

ON the homes moving in your park , have you tracked the source ? do you have a breakout of , was there a park shut down ? Land home deals moving into parks ? Breakout of brand new versus old homes?

It sounds like you guys are doing good , why decide to still do the POH (cost recoup? )

Do you know how far below market you are lot rent wise?

Thanks


#11

@Marvel_Equity , as per your questions:

  • " On the homes moving in your park , have you tracked the source ? "

Yes, we have tracked the Mobile Homes that move into our Park.

  • Total # Of Mobile Homes Moved To Park: 15 TOHs
  • Total # New Mobile Homes: 1 TOHs - (Owners purchased from a Dealer and moved to our MHP. This is our one and only brand new Mobile Home)
  • Total # Mobile Homes That Need Renovations: 10 TOHs - (These Mobile Homes all needed some form of renovations. These Mobile Homes were also located on the outskirts of the Tri-County Area, so the Owners wanted to move to a location at the center of the Tri-County Area.)
  • Total # From Single Family Residence With Mobile Home On Lot: 1 TOHs - (This Mobile Home was literally located 5 feet from our MHP Greenspace on a residential lot with a stick built house. The stick built house was sold and they moved the MH to our MHP.)
  • Total # From MHP 5 Minute Radius: 1 TOHs - (Their Original MHPs did NOT want these Mobile Homes and forced them to move.)
  • Total # From MHP 10 Minute Radius: 1 TOH - (Again, their Original MHP did NOT want this Mobile Home and forced them to move.)
  • Total # From MHP 15 Minute Radius: 1 TOH - (Again, their Original MHP did NOT want this Mobile Home and forced them to move.)
    ** Please note: We did NOT poach any of the above TOHs from other MHPs. We were approached by the Owners of the MHs stating that their current MHP was forcing them to move. Thus, they wanted to move to our MHP. **

Do you have a breakout of , was there a park shut down ? Land home deals moving into parks ? Breakout of brand new versus old homes?

  • No - Park Shutdown.
  • No - Land Home Deals: The 10 Mobile Homes located on the outskirts of the metro area were located on both private lands and Mobile Home Parks. All these Owners wanted to be in the center of the Tri-County area. In addition they wanted to be able to renovated their Mobile Homes in our MHP.

It sounds like you guys are doing good , why decide to still do the POH (cost recoup? )

  • We would love to sell all our POHs.
  • On several occasions we have given our current Renters wonderful terms to buy the Mobile Homes.
  • In our MHP there seems to be those who just aspire to “Rent” and those who aspire to “Buy”.
  • We sold the 2 Mobile Homes because the Tenants had moved out of the Mobile Homes and the spread between the Lot Rent and Mobile Home Rent was not as high as other POHs.
  • Thus, we made the decision to renovate and sell.
  • The Mobile Homes were:
    1999 Singlewide - 2 Bedroom - 1 Bathroom
    1973 Singlewide - 3 Bedroom - 1.5 Bathrooms - (Legally it cannot be moved as it is too old)

Do you know how far below market you are lot rent wise?
We are located in the following area:

  • Primarily Residential Area with 4 other MHPs in the same residential area
  • Located off Main Road with Hospital & College and all the fast food restaurants
  • Near Interstate
  • Near Hospital
  • Near University
  • Near County Park
  • Near Starbucks
  • Near Zaxbys, Wendys, Sonic, Cookout, Arbys, Dunkin Donuts (Gotta feed those College Students)
  • Near CVS
  • Near Dollar General
  • Our MHP: $275 ( Does not include Water & Sewer. New Rate starting in July 2018 - Our MHP still is turning around and has some street drainage issues. If you ask Frank, we are still under-priced.)
  • MHPs in our Pocket - (1 - 5 Minutes Away): $305 - $375 (Higher End includes Water & Sewer - Owners=Locals)
  • MHPs just outside our Pocket - (5 - 15 Minutes Away): $380 - $464 - (Higher End does not include Water & Sewer - Owners=Corporations)

#12

Thanks for the detailed responses , I appreciate it!


#13

This is Amazing. Great post!


#14

Great responses. As previous people have stated, the cost to “future proof” your community to 200 AMP is negligible as most newer (16 x 80) and larger homes with Air Conditioning will require 200 AMP service anyway.