I have been reading everything you folks write-----trying to learn enough to get started without shooting myself in the foot.
I am aware of a small “turn around” park in a small town, pop 5-600, that will support only low lot and house rents. About 25% of the lots are empty. It is a MESS but on the surface it appears it would cash flow as is.
IT IS SMALL----does size matter? There are less than 20 pads with land available for another 6-7. Does the cost of developing new lots make it a poor way to expand --make money–create equity? The park IS on city water and sewer.
Most of your postings speak of parks with many more lots.
I bought an 18 unit, 2 acre park, just as you described in March 2004. It cost me $825 which was the first payment on a ten year contract at 7 percent and the cost of a deed, note and mortgage, and file’n fees. Yes, it was a purchase money mortgage with the original owners. The price was $60,000. I sold it a year later for $90,000, on a contract for the sale of real estate to a tenant that already had four units in the park and acting as a landlord to those occupants. She defaulted two years later, last May. Last week I turned down $75,000 all cash for the land. I have decided to turn it around myself now, as I couldn’t make a better investment with the gains if I sold out. It has city services. This is a value that is very hard to put a dollar value on, but one of my bankers claims it’s worth a lot in leverage power, versus a rural park. And I agree. Police power alone is invaluable, as opposed to Sheriff power, now you have both. City ordinances in place will most likely give your rules much more clout. If your little park is cash flowing. Get it. And forget about developing those other lots until you understand if it is already zoned for the same as the park. Just do it. Good luck.
Thanks for your comments! I need to have a plan as to my goals and an “out” strategy. Don’t know who I would sell it to—towns pretty small. I know that my cleaning it up, filling the empty spaces, raising the rents and possibly future development would make it much more valuable. All the above should also increase the cash flow. On your suggestion I am going to explore it further.
There are certainly economies of scale you cannot get with a small park but that should not stop you from buying this one as long as everything checks out OK. I’m also in a small town with a small park and one thing I found is that there are all sorts of small parks here and there in the countryside. I’m sure you will come across other places as you get to know your area. I’m thinking that once mine fills up, I may buy another one close by. My eventual goal is to own 75-100 spaces whether they are in one park or several. This makes management from a distance more efficient as I can visit everything I own on one trip.