Help me evaluate this park

66 pads, 48 paying tenants at $300 a month, under contract for $500,000

The park is in a town of 50,000 people, about 30 minutes away from a decent city of 300,000. The local town has an unemployment of 8%, above average crime, and SFH prices of around $50,000-$75,000 nearby based on zillow. Market MHP lot rents are around $320-$330 a month.

I’ve attached what I feel is a fairly conservative/pessimistic budget for the park based on the sellers numbers with extra expense items thrown in that were left out:

There appears to be some fat in the expenses. The trash, taxes, and insurance can likely be cut.

Here’s one of the thing that worries me about the park. I don’t have an acreage measurement for the park, but some of the homes are very small. With google earth I went through and estimated the box length of each house. I grouped the data together into the following:

houses with a box size longer than 60 feet: 11

houses with a box size between 56-60 feet: 22

houses with a box size shorter than 56 feet: 26

I’m worried that many of these homes are going to be too hard to rent out once they become vacant, and are just going to be tear downs and empty lots. For some of the small lots there could be the potential to combine them into one larger lots.

You mention renting the homes, how many are park owned. This could be a major deciding factor in determining value of investing.

As an example I personally would not purchase a park with park owned homes. Too much maintenance work and quality of tenants that rent homes is too low.

None of the homes are park owned. Several of the vacancies have homes on them, just no resident (and the park does not have titles to them).

It is my understanding that the owner has typically sold homes as fixer uppers. Since that attracts a lower quality tenant, in my financial projections I put in a 10% collection loss calculation.


I agree, those expenses could come way down - they are currently at 68% of Gross. Not knowing very much about the deal otherwise, this looks like a good opportunity based on the purchase price of 500K. If you were to buy the park and turn things around (enforce no-pay, no-stay policy, enforce basic rules, evict the bad apples, rehab and fill some vacant homes, etc) then you may have a winner deal. Your collection loss would stabilize over time and become minimal as you will evict (or they run off) the bad tenants and properly run the park. If my calculator is working correctly… 48 x $300 x 12 = $172,800 Annual Gross Rents, less 40% expenses ($69,120) = NOI : $103,680, plus some upside if you can rehab and fill some vacant homes.

Just some general thoughts here, but I think the deal has lots of potential. Let us know how this goes for you!


On the surface the income does look good based on the purchase price but the expenses on this park would definitely turn me off on this deal. I would pass unless I definitely knew going in that they could be drastically cut to a more reasonable level.

My intent based on reducing park specific expenses would be to upgrade the community by fixing up and selling the homes to attract higher quality tenants and cleaning out any existing low quality tenants.

I would guess that by overall upgrading of the park, homes and residents it would not be inconceivable that you could fill the park. Having smaller homes I would target a more senior demographic primarily retirees, widows etc. I would develop it as an adult only community attracting buyers from the larger city near by.

Personally I would avoid first time home buyers, young families and those on assistance but that is only my business approach to cleaning up a community and simplifying management.

How do you target seniors?



Noel -

I am ‘neutral’ on this deal. The price seems reasonable, but keep in mind that the one thing you can not fix about a park is it’s location. This park is in a town with relatively high unemployment and relatively low housing prices (and what percent of the housing stock is for rent? You can get this figure off I find towns with 35%+ rental are a disaster - no pride of ownership, and MHPs tend to compete with apartments). The economy does not sound great, so I am not as keen on this deal as you may be.

It also sounds like there are POHs. You seem to describe them as homes ‘without titles’ - but that means POH. You’ll end up owning those, so you might as well count them as such now and budget for their repair.

Good luck,


Targeting seniors is not too difficult, first with the wording of your ads, change your park rules to clearly state adults only community. Your screening would then eliminate anyone with children as well as favour older applicants. You can not accept young applicants as they may end up having children. Remember when you reject applicants you never tell them the reason why they are rejected. You also need to have rules in place restricting the number of residents permitted per household.

It is somewhat difficult as you will get push back but you bush back twice as hard and the residents with children will give up and leave. The problem comes from those with children that simply stay and follow all the rules. You have to wait for their children to grow up and leave but once they are adults the park rule limiting residents in a single home kicks in.

Park rules would also be changed and strictly enforced in areas that would make it less attractive for those with children to stay. As an example when my community was changed over to adult only the park rules stated no play equipment in yards and all toys/bicycles etc must be stored away at all times when not in use. You will quickly discover how lazy most parents with children can be and you will be repeatedly giving them notice to clean up or move which eventually will drive them out.

It evolves slowly and as it does the number of seniors increases and those with children prefer to relocate to child friendly communities. It can be a difficult process but it pays dividends in the long term.

Resistance to change is inevitable and many will say you can’t do this that or the other due to discrimination laws or whatever but if you are persistent within 10 years you will evolve into a seniors community.

The key in the case of this community is to fix up the park owned homes and be very selective in who you sell to. Remember as the owner of the home for sale you have 100% control over who you sell to without fear of being accused of discrimination.

@Jefferson: 40%, interesting metric Jefferson, thanks I had never looked at that one before

@Greg: Thanks for the input, I can definitely see how the older homes could appeal more to seniors. Personally I would be worried about labeling my park an “adults only” park as that is a clear violation of Fair Housing Laws. I know Frank has actually been charged in a (bogus) fair housing case that he luckily won. It sounds like scary stuff though.


I’ve been on the road and missed this post originally – my apology.

At 48 x $300 x 12 x .6 x 10 = $1,000,000 and you can buy it for $500,000 – that can cure a whole lot of ills with the condition of the park-owned homes. The home sizes do not scare me that much, as I can buy 2 bedrooms new to fit those sizes.

If you don’t want it, we might buy an assignment of the contract, pending the actual location and due diligence on it. But the deal sounds compelling so far.

One note, it is illegal (to my knowledge) to convert your park to “adults only” – that’s a violation of fair housing. You can convert it to 55+, but only after you have done everything required by HUD and received the approved designation. If you have a park filled with 2-bedroom homes, it will naturally be less kid friendly, as you have insufficient bedrooms for most families. But I would keep it as a family community, so you don’t box yourself into a corner. Seniors are like hummingbirds, hard to attract and hard to get a handle on. All-age communities are the way to go, in our opinion.