What Size Park on First Deal?


#1

I have a few years of SFH investing and would like to buy a park in the Carolinas. What would be a good size/price range to look at? Should I go for a “rundown”? City services vs septic?

All input is appreciated. I live in CA but I have a son in the Fayetteville/Spring Lake NC area, so anything within a 2-3 hours away from him would seem ideal. I get to have “boots on the ground” and I get an excuse to go see my 6 grandkids!!!

Rod Gregory

661-510-7713 - c


#2

Rod,

The size/price answer is going to be different for just about every investor. If you are going to use an on-site manager, my recommendation is at least 60-70 spaces and 70-80% occupancy. You need to make sure there is enough income to cover the expenses and your debt service, along with the rate of return you desire on your downpayment.

Public utilities are always better than private (i.e. water and sewer). If you plan on buying a “run down” or what we call a “turn around” park, you will need someone on-site or very near supervising the cleanup and mobile home sales. I definitely wouldn’t advise anyone trying to do this type of project from a distance on their first deal without training or partners who have experience in the business.

Steve


#3

Rod,

I live in CA also (Santa Clara) and I just bought a 42 unit community in Ohio. I, too, used to buy, renovate, and rent SFRs. Oh, Lord, do I ever HATE tenants!

Yours is a difficult question to answer and it is good you are seeking input from others. However, I believe that you may not be starting in the right place. Before you ever even consider a community, you MUST get educated. Re-read the previous sentence. Do it again and again. I made the mistake of buying my first community (Tuscon) thinking I knew all there was to know about investing. It’s dirt, right? What can go wrong with dirt? My business partner and I lost about $200K and finally gave it back to the sellers. Ask Corey about “Chernobyl.”

So, how to get educated? I recommend you attend all of the following at least once:

  1. Mobile Home Millions

  2. Meeting of the Minds

  3. Bootcamp

Also plan on the following:

  1. Assume you know absolutely nothing about this business.

  2. Virtually every seller is pure scum who will try in any way possible to cheat you out of your hard-earned money.

  3. Ditto for lenders.

  4. Reading this forum for at least a year.

  5. Looking for at least a year and probably 2.

  6. Hiring someone to assist you with DD.

  7. Spending tons of time on airplanes visiting parks that are a complete and total waste of money and should be scraped down to bare ground.

  8. Spending lots of money on every possible inspection you never heard of or thought you would need.

Does the above sound expensive? Hell yes it does but it’s also cheaper and less painful than losing $200K.

Oh, yeah, your question. The community that is right for you is the one that actually comes together AFTER doing all of the above. You will know the place is right when it finds you or vice versa. Isn’t that just so Zen? (That is how we talk in CA for all you out-of-state readers:-))

Feel free to contact me and I’ll answer any questions you care to ask. However, if you are not willing to make the above commitment, you shouldn’t be in this business.

Rolf


#4

Rod. Good luck. The family close by at our age is important, that’s for sure. If I were you I’d hunt a park that you could turn around with your own energy and labor and management expenses and investment dollars. Find one with city services that’s in trouble due to burned out owner. See if it’s paying for the license, the security lights, and insurance and the property taxes. Can you mow grass? Will you mow grass? Do you enjoy landscaping? Are you the general contractor type? Do you plan to flip it , or

grow old turning it around to the maximum upside of the business? Can you handle being responsable for a community filled with tenants? Have you ever seen a park riot?

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Rod this is a business in which the investors help fill a gap in financing for affordable housing. Your future is going to be tied to local rent rates. Have you checked George Allen’s Communities Rating Chart for the latest average lot rent rate in the area you intend to relocate to?

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Rod look at United Country site for that area also. And see what’s happening on mhpstore. If you read this far, I’d suggest you return and reread Rolf and Steve Case.

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Good luck Rod. Let me know if I can help you.

.


#5

Rod

You have to love this forum. No one will let you jump without at least showing you a safety net. No matter what experience we have or what we may think we know MHPs bring a whole new demention to investing. I am new to investing in this asset class and will 2nd or 3rd all the above suggestions. Get the education before you buy your 1st park. I have been a Broker and General Building Contractor for years and thought I knew something, but my real education about making a profitable and successful MHP purchase came from the pros that post on this forum and all the learning gained from Rolfs suggestions.

Mobile Home Millions Conferences, Bootcamp and Meeting of the Minds

As far as sellers go they dont have a chance to rip you off if you go to the negotiation table armed with the knowledge and wisdom you can gain fron this forum and similar investing sites

Rick Ewens