Deal Breakers for Acquisitions

mobile home university
1

Hello,

I’m looking at small mobile home parks to invest in as a first try at mobile home parks. I’m looking for a property that has good value-add potential along with the ability to be seller financed to put as little down as possible. Seems like a great way to control risk and get started.

I don’t want to want to buy something that nobody else will want to buy from me after I add value because of some pre-existing condition. What are things that make selling a mobile home park very difficult due to some pre-existing condition that can’t be fixed for a reasonable cost? Stated a different way - What are some deal breakers for buying mobile home parks?

2

Definitely go to the MHU bootcamp if you haven’t already - you’ll learn what you need to know about exit strategy. For me I’m reluctant to buy parks with a wwtp, small lots that don’t fit modern homes, small parks in small towns.

3

Thank you for sharing!

A couple questions:

  • What is WWTP?
  • What would you consider to be a small lot?
  • What would you consider a small park?
  • What would you consider a small town? I’m looking at a park in a small town 1 hour outside Charlotte. Do you think this is proximate enough to a large growing city that it is worthwhile?
4

You will learn the answers to all of these questions in the bootcamp. Don’t buy an park until you go.

Waste Water Treatment Plant
A small lot won’t fit a modern sized home (approx 14x70 and larger). You’ll also have to calculate for setbacks
Under 15 lots
Population less than 1000 that is 45/60 miles from a large metro (at least 50,000 population)

I also wouldn’t buy a park where the rents were at or above market rents… others might be ok with it.

5

As with @tmperrault anything with a WWTP. or in a flood plane. Not that WWTP can’t pencil but it just adds a lot of complexity to your operation. Everything else is fixable and flexible if pricing is attractive enough.

I have also heard but not experienced park owners unable to infill or refill their parks due to City ordinance. That would be a walk away moment too I suppose.

The park you are looking for at this point is a pretty rare bird if it is all TOH. You may find some with a blend of POH rentals which is fine but you want to ensure the maintenance is kept up.