Certainty versus Uncertainty for new investor

I have been lurking on this forum for a while. Two years ago, I looked over some listings for MHP’s in my area, but made my first real estate investment in a duplex that I gut renovated. It worked out well but I am back at the same point as two years ago, looking at MHP listings again. Logically, it makes sense as a good investment, but I lack the certainty that a buyer will appear for a mobile home in the park I buy or that if I turned around a MHP and that there would be a buyer for it.

Basically, I lack the experience you all have.

One of the parks I looked at 2 years ago is still available, a 21 space MHP with 16 occupied and 5 unoccupied spaces. No park owned homes, $290 /month lot rent. Water and sewer are connected to municipal water and sewer. There is one master water meter and nothing is submetered. Built in the 1970’s and I am told that the electric meters have all been replaced within the last 4 years.

The lots are gravel pads and the existing units are single wides. It is a rural park on a main highway and fast food and Walmarts are 5-20 miles away

So using a thumbnail formula of 16 lots X $290/month X 70 = $324,800 as a rough estimate of value, the listing price of $169,000 sounds like a good reason to investigate further. I chatted with the realtor and he presented the seller as willing to do a lease option and that the price was not firm at $169,000. I did not press him further because I wasn’t sure I was serious.

Having refinanced my duplex, my private investor would be pleased to have me reinvest that money for him. So another thought is should I be looking bigger than a 16 lot property with $100,000 (borrowed) as a down payment in a deal where the seller might hold a large second? Should I start small to get over my newbie jitters?

Sorry for the unfocused post, but I would like to see how you all appraise my situation.


Welcome to the forum! First off, I would probably use a smaller ratio that “70” on a smaller park like this. It will depend on who pays water and sewer but I would say you should use a “55” or “60” ratio to figure the estimated value. Even at that though the pricing looks good.

You mention the park is rural but on city water & sewer.

I would look at this deal whereby you get the highest mortgage fromt he seller you can and the longer term (or lease / option) and you use your investor’s money to not only put up the down payment but to fill the other 5 lots. Filling that park should get you to a NOI of close to $40,000 per year

Assuming everything else checks out in diligence I think this looks like a fantastic first time deal. And if you decide to pass on it I would suggest you pass it around to other first time investors on this forum for a referral fee.

Dave Reynolds


Thank you for the welcome and the prompt response. The referral-for-fee option is something I had not thought of, but knowing that that is a possibility, it gives me a safety valve for making something off the deal if I don’t go through with the purchase. I will start bargaining to tie the property up and begin due diligence and see what the numbers are.


Good luck, Lester. It looks like a good deal from the numbers you posted. Also, we have a “Manufactured Home Community Self Inspection Report” in the Loss Control Section of our website. It’s a good tool not only for risk assessment, but also for someone doing due diligence on a park purchase. Feel free to pull it off and use it www.mobileagency.com


Can you keep us posted on this property? If you end up deciding not to go through with the purchase yourself, I would definitely like to talk to you about a referral-for-fee option.