My wife and I are looking at buying our first mobile home park. I have done a fair amount of research and have a few basic questions before we go ahead with any deals:
Is it a bad idea to buy our first park out of state? We are in Utah and are looking at parks in the Midwest. We would not be able to get to the park often, but the out-of-state deals seem to be the best option.
Is it necessary to have an on-site manager if none of the homes are park owned? (We were thinking about having the realty company manage the park with accounting, collecting rents by mail, etc., but they would also be in a different state I believe.) In the 10/20 Investment book, the idea of having an onsite greeter and an out of state P.O. Box as the manager is mentioned. Can anyone elaborate on this?
Would we be able to set up an LLC in Utah and receive the protection from that if the park is not in Utah or would we need to set up an LLC in every state we buy a park in?
I have heard that you do not count park-owned homes in the evaluation. I am kind of confused on what this means. Do you not count the lot rent in your analysis, or the rent collected from the home itself, or the actual sales price of the home, or all of the above? I understand that you want to get rid of the homes as quick as possible, but exactly what do you do to not factor the park-owned homes into your analysis?
The main park we are looking at is fully occupied with no park-owned homes, but is currently not sub-metered. It looks like that may be the place to add value, but I’m not sure there is much else I could do to increase the value (the rents may be below market, which would be great, but we haven’t checked). Then again, maybe a park like this would be a good first investment. Should we be looking for parks that have more potential for improvement?
Thanks in advance for any input. We would like to get started, but a better understanding of these things would help out a lot.