I’m a new MHP investor, looking for my first MHP property and found an off-market deal. I’ll be visiting the park in a few days and have a list of questions but wanted to hear what questions you’d ask! What are some good questions to ask the owner?
Property details:
25 lots
18 TOH
7 vacant
Public water/sewer, owner pays
Owner self-manages
Brandon,
A lot of questions to ask for sure. I am surprised no one has jumped in to help so far. I am no expert but your deal sounds a lot like the first park I bought years ago. Based on what I went through with my park… here are some quick thoughts.
Get a good understanding of the water and sewer lines. How old are they? How is the billing for water and sewer one bill to the park every month? Have there been any extensives repairs needed to either line over the years? After you leave the park go straight to the City and ask confidentially what the condition of the lines are into the park. Have there been issues in the past?
Who pays the garbage? If it is a dumpster paid by the owner… ask the City if the garbage service can provide cans to residents and bill them individually. Even if it has to be one bill to the park owner… you can pay the bill then charge it back to each tenant. You don’t want to be paying their garbage bill.
Walk the park inch by inch… get a good look at the TOH homes. People taking care of them? Any risk of people abandoning them?
Park maintenance? What is involved? Mowing grass, week control, snow removal? If you don’t live near the park and the current owner does all that on his own… you will need to get a handle on that cost as you come up with an offer.
What are the rent rolls? People paying on time? You may not get a good look at the financials (and they may be chicken scratch to start) until you make an contingency offer. Can you raise the rents? Will people move if you do? Are there other parks in the area and how does your rent/park compare to others?
Take a look at those vacant lots also. Me personally??? I would investigate turning them into long term RV rental spots. Depending on the location there may be a demand for that. More and more people are utilzing RVs as permanant housing and it gets your park filled up quicker than if you are waiting on people to move in with mobile homes. If you have larger mobile home lots… it is a huge draw for people with RVs to live with you than being crammed into small rv slots like sardines.
Lastly I suppose… at least for now as you start this journey is will the owner carry the contract. If so that makes things much easier for everyone. Certainly you will need to go through escrow and make sure everything is dialed in. Lower the interest rate the better, If the owner wants a 10 or 15 year call on the note ask for a buyer executed 5 year extension if you make all payments on time… worth the ask. I got that on my first park and it gave me time to pay the park off and avoid the balloon payment.
Good Luck Brandon… you can certainly message or call me even if you have any questions. I am not one of the institutional park owners on the site. I am a mom and pop owner with just three parks… so just know that. LMK if you need any additional help or advice…
Roger
Thanks so much for your detailed reply. Those are all great questions and things to look for. The owner took me through the park yesterday and was able to answer all of these questions and more.
The park is very close to a major lake destination, so the RV spots could certainly be a possibility. Turns out there are actually 21 TOH with another moving in soon, so there would only be 3 vacant spots. Also turns out he owns a smaller 8 lot community on an adjoining property that he would also want to sell. Things you probably wouldn’t find out unless you actually go and talk with the owner directly - the benefits of a smaller mom and pop park I suppose.
Awesome! Sounds like a great opportunity! Go get em!!