I am just getting into the idea of owning a MHP. I currently have a few rental properties with a business partner, but this will be separate from that since he is not able to invest more into our company at this point. There are a few small parks within a reasonable area from me that I am considering as a starting point. By small, I mean between 5-15 lots. I have read some of the fears about such small parks, and they each seem to all be POH places. One that I found is not really a MHP, but an owner that has 5 lots with homes on them so I see it as a “separated” MHP in a way. Does anyone have something like this where they have multiple lots with homes, but they are not all together (but within a couple miles of each other)? What are some of the major concerns of a small park and what is the likelihood of being able to get the tenants to become owners renting the lot?
It’s fairly common for people to snap up multiple land home deals in close proximity to each other and then bundle them together to call it a MHP. If the homes are a couple miles from each other then these are just packaged land home deals. You won’t get the economy of scale for mowing, tree trimming, etc as your laborers have to pack up their gear and go to each property - so naturally your expense ratio will be higher.
There are a lot of threads about the risks and benefits of small Parks and won’t open that discussion back up. However, the concept of lot renting in a neighborhood of mobile homes where both neighbors next door are the land owners can be a tough sell, and may seem like trickery to the purchaser.
I see the best use for a deal like this is to fix up the homes and sell them individually with the land as an owner financed transaction. I have done this where the home has surrendered the title to the land on a permanent foundation (e.g. hitch and axles removed) and everything is real property. You still have to go through the Dodd Frank hoops.
There are a number of ways to make it work, but this specific scenario is not an MHP in any form.