Working on purchasing second park. I have a question. I have $50,000 for an owner financed park under $400,000. My options are a little confusing, I have two parks with 45-1 hr both with potential for $8,000/mo although surprisingly the cheaper of the two by $100k has higher rent roll currently. Both have 16 sub-metered lots and fully POH’s. Both are an hour outside of a metro area over 2 million people.Both will seller finance 5-7 years.The third option is a 55 lot park within 10 mins of of a 250,000 metro area, with a mix of 16 lot rent and POH’s. This park is about 2 hours away and has a huge upside for around the same price. This park though requires refy by a lender in 12 months to get current owner paid out. He moved across country and tried owner finance once and it didn’t work out. The previous person who tried to buy the park ran it down and the owner had to scrap 20 mobiles and rest moved out. So the park is starting back with a current rent roll of $5,000/mo. All sub-metered, but have septic tanks. Sewer is available to plumb in.I wished I had funds for downpayments on all parks but doesn’t seem likely at this point. Any insight would be helpful for this newbie.
Btw, I would probably look at some kind of Lonnie deals to file the large park if I got that one if that is not too insane for a newbie.
I don’t understand your terminology: what do you mean by “16 sub-metered lots and fully POHs”? Do you mean 16 lots with 16 POHs?What is the lot rent in each of the first two parks, as well as the current occupancy, and are they city water & sewer, no master-metered utilities, and who pays for the water/sewer?The third park is a total loser and I would not even bother looking at it. It is on septic, needs a refi in 12 months, and has low occupancy. I can imagine a worse starting scenario. Having sewer near a septic parks is of no value – you will have to re-pipe the entire park.So it’s really #1 or #2, as #3 is out.
Thank you Frank, I was thinking the opposite so I’m glad to know that would be a bad choice. The first two parks are 16 mobiles all park owned, sub-metered for all utilities, city water/sewer. Two bedrooms rent for $450 and 3 beds rent for $600. The first park is $250,000 and is 80% full. Second park is $370,000, a few homes needing rehab, same rents, 90% full. The areas are comparable, with the second higher priced park being a little more populated by a few thousand people. Both parks are within 30 minutes of each other. The second park owner thinks his park should be priced at $500,000 where the first one just wants to retire out of her park. What would be the biggest deciding factor other than the price and the owner personality to make an offer on? Do you work both until you get through due diligence and risk loosing one or both?
We can’t even begin to value these until you know what the lot rent is (not the home rent). Call the nearby parks and see what the prevailing lot rent is in the area.