Good afternoon all! I was doing some preliminary research and stumbled upon this page. I was considering building a new community and came across the article on this site stating something to the effect of “why no one should build a new community from scratch”.
Has anyone had experience building a community?
Key facts I’m seeing:
- Intent is to develop land and own homes. Pro Forma pencils out well
- Market rents for apartments is prohibitively high and 95% occupied
- Land is zoned appropriately
Is there a risk here I’m not understanding? Any insights from those currently doing it is appreciated!
Replying to myself here. I was giving this some additional thought. The common refrain seems to be zoning, however there’s a process in place to convert MH to real property. Why not find multifamily zoned property, affix the units to a permanent foundation and create real property out of it?
The development would be in texas
What you are proposing sounds more like a build for rent community. It wouldn’t be a typical mobile home park where the tenants own their own home. I don’t think what you are suggesting is necessarily a bad idea, depending upon execution. It’s just that most people here wouldn’t view that as a mobile home park, in the traditional sense.
A lot of cities don’t like parks because they are viewed as an eye sore on the community, the property taxes paid by park owners are far from what the city as a whole spends to educate and provide other services to the tenants who live there, and they can be challenging to finance.
Building one is also challenging financially because the cost to build (at $25,000-$35,000 per lot) has a lot of risk and carrying costs whereas the finished project might not be worth much more than was spent to build it. It’s usually more efficient to just buy an existing park and improve it.
I have a park that has some vacant land behind it. In the case of this city, they want me to build it. I’ve proposed a plan that has 33 lots and would have a separate entrance from my park. Making the project its own park. As willing as the city is, the project still looks somewhat questionable. The land is completely flat and has no trees and would probably be the easiest piece of land to do my first development on but it looks far from a no brainer.