Help with pending MHP deal PLEASE

First of all, thank you to MHU…I have enjoyed everything about this website and all of the books,etc. that I have purchased from this site also. I hope to be able to attend the bootcamp in the near future.

Thanks for sharing all of this great information with us!

After making an offer on my first MHP, I found this site and have since purchased books and the MHP evaluator. I have used it to try to figure out the value of the Mobile Home Park. Initially I decided to make a written offer and do my due diligence and then renegotiate the price.

The problem - they accepted my offer and I am trying to interpret everything I am sorting through in my due diligence.

The owner is a very sweet older lady who has allowed the tenants to run all over her while allowing the park to fall into disrepair. She has made the following remarks to me (that make me feel like she is not going tobudge on the price):

  1. "you know you were not supposed to get the 2nd sheet that had the price and financing offer on

it…my son gave that to you by mistake…that was the price for a friend of mine that was interested in

buying the park…you are really lucky because you are getting it for a really good price" (the first time I

looked at the property, her son met me there and gave me 2 papers - one had the income and expenses

for the past two years & the second paper had price at $300K with offer to sell it with seller financing

with $50k down and vendor’s lien for $250k @6% for 10 years.)

  1. "I probably should not be selling this property right now with everything that is going on in this

area…" (the nearby area has a new nascar race track going in and another close area has a new steel

mill going in…all everyone is talking about is “how the property values are going to go up”.???..I

have not been doing this long enough to know if they know what they are talking about or not…the

real buzz around here is that RV Parks are going to be a gold mine with all of these construction workers coming in from out of town…apparently, they say that the construction workers will come into town

to work and bring their RV and leave them parked for 2-3 years while the construction is going on…I

am not really buying this, but as I said, I have no experience with this market/area or this venue

(RVs/construction workers from out of town)…I can’t wait to see what really ends up

happening…actually a MHP close to my house sold right before I looked at it (around $500K) I was

sooooo excited when I found it b/c it was EXACTLY what I was looking for…so I called and it had a

contract on it…fast forward 2 months…I see it for sale on a MHP site on the web as an RV Park for

$1.6M…I drive through it the next day and it looks exactly like it did 2 months ago…like a MHP

that they had pulled a few MHs out of…I was crushed…it had GREAT potential as a MHP…now

it is an RV park on paper…the plans are drawn, guess they are waiting for a bite before they begin the


I know a mgr of a MHP here that has RVs also and 6 months ago she told me RVs are

where the money is… oh well, I guess there are people on this site that do both…I just have no

knowledge of the RV thing…maybe someone can shed some light b/c I would love to hear about it

first hand…maybe then I can believe it…right now all I have seen are articles in the paper saying

how "the person in this area that is going to really cash in on all this construction are the people who

own RV Parks…" they actually said that the construction workers bring in their rvs and live in them

M-F to work and then drive their cars back home for the weekends…has anyone ever heard of this?

But then what happens in 3 years when the construction is completed?? Do they take their RVs and go

home? ANd what happens to the RV parks, do they convert back to MHPs?

Anyway, back to my MHP dilemma:

She obviously thinks that her park is worth $300k…I do not remember exactly what the value was

when I ran it through the evaluator (b/c I did it using different figures 150/month 175/month and

200/month…I need to rerun it…but I think she is thinking just based on the commercial aspect

of it …I do plan to ask her how she came up with the price (when we sit down to renegotiate)

AND of course from the first day that my re agent showed me the property (it was NOT on the market)

my agent has told me that another agent in the office has an investor that wants to buy the mhp if you

do not…and unfortunately it is true b/c the owner of the MHP also has some apts that she was

considering selling…we told our agent that we were very interested in them if she decided to sell

them…the other agent in my agent’s office had his investor fly in from Calif and they have already

made an offer on the apartments…ANYWAY, we put in an offer immediately on the MHP b/c I

have learned, make your offer and then do your due diligence…b/c if you take the time to think, you

will lose the opportunity…and it really turned out to be true with this one…On the first day my

agent said “if she sells the apts they will probably be $1.2M” …“would you still be interested?” (she

knows I am not rich…LOL!!) ANd I said “yes!! If they cash flow!!!”…so she said that she would let me

know if she did decide to sell them…I should have made an offer of $1.2M on the apts on the 1st day

b/c now she has decided to have the apts appraised and my agent said the price will probably be $2-

3M…if she sells them…ANYWAY, off the subject here…

Anyway…I have been meaning to call you guys at MHU and run the details of this MHP by you and

ask you a few questions…but b/c I am so stinking busy during the day, time has passed and my due

diligence period is running out and I have yet to touch base with you guys…I have read through the

materials that I purchased through your site, but still do not feel comfortable with my ability to

determine a fair price. (also, now I am becoming a chicken about renegotiating the price…there are

sooo many factors going into this!!) WISH THAT I HAD known about your bootcamp BEFORE I made

the offer!!!

But if ANYONE feels inclined to give me any useful advice, I am all ears (and forever grateful)…and

I WILL be attending the boot camp so I will be better prepared for purchasing my NEXT park…

This is a 23 space mobile home park on two acres in a small town about 15 miles outside of Mobile,

Alabama…the current owners have owned the park for about 25 years - I believe that the park is

about 35 years old…it is one block off of a major highway with tons of stores, resturants, etc…(I

believe it is zoned commercial but I just realized that I have not confirmed this yet) …the current owner

states she “has lost” her will and the park has been mismanaged and run down for the past several

years…she states that the park “started going downhill” when the on-site mgr decided to buy a house

and moved off the property. She does not screen tenants and allows just about anyone that offers to

pay her rent to move in…most of the occupied trailers get $150-160/week…BUT right now 4 tenants are behind on rent…3 tenants are up for eviction (she already evicted 2 last month trying to

clean it up for me) There are cats and kittens everywhere (although no pets are allowed)…in doing my due diligence EVERY SINGLE mobile home that I went into had at LEAST one pet if not two…several had pet urine and/or feces on the floor…it was unbelievable…MOST of the ac

units did not have filters in place…and 1 or 2 that did have filters looked like they have NEVER been changed…only ONE unit had a clean filter in place…here is a break down of the units…some of the units are gas/electric …some had ONE smoke alarm, NONE had carbon monoxide

monitor…none have skirting intact…at least 6 dogs running around and way too many cats & kittens…many needs roof to be cool sealed…none of the stairs at front or back doors have hand

rails…I am coming back with an guestimate of $100k to get park where it needs to be…plus $10k for the skirting - we use metal roofing tin bc it lasts longer than the vinyl…and after coming up with

$50k for the down payment I do not want to have to come up with another $100K for repairs…I know I am still in the consumer mindset (and not the investor’s mindset)…but I am new at this!

  1. 1987 flintstone 14x60 3/1.5 BAD condition NO A/C unit VACANT

  2. 1978 buccaneer 12x56 2/1 BAD condition VACANT

  3. 1997 fleetwood 14x58 2/1 $150/week rented

  4. 150/month LOT rent (pretty nice) (behind $150) $150/month

  5. 1982 capella 14x52 1/1 good condition A/C needs to be replaced VACANT

  6. 1979 bucaneer 12x65 3/1 (behind $1030) $160/week EVICTION

  7. 1995 fleetwood 14x52 2/1 $160/week

  8. 1976 challenger 12x48 2/1 evicted 2 wks ago - lv vacant for me to fill per my request

  10. 1964 Champion 12x48 2/1 window unit acs & NO HEAT $450/month rented

  11. 1997 Fleetwood 14x52 2/1 $150/week rented

  12. 150/month lot rent (pretty nice)

  13. 1997 Fleetwood 14x52 2/1 (behind $320) $150/week rented

  14. 1994 General 14x56 2/1 $150/week (behind $5110 !!!) EVICTION

  15. 1997 Fleetwood 14x52 2/1 $160/week EVICTION

  16. 1984 Anvil 14x60 2/2 (behind $290) $150/week rented

  17. 150/month lot rent (pretty nice) $150/mo

  18. 1986 Destiny 12x40 1/1 (package unit caught fire…needs new unit) VACANT

  19. 1993 General 14x70 2/2 $160/week rented

  20. 1977 Franklin 14x65 2/2 (behind $150) $150/week rented

  21. 1973 American 12x48 2/1 DAMAGED VACANT

  22. 1995 Fleetwood UNSALVAGABLE (tree fell through it during hurricane) VACANT

  23. 1985 Challenger 14x52 2/1 evicted tenant last wk, lvng empty for me to fill

I had my rehab guys walk through and look at all of them with me. All of them need A LOT of

work…our guestimate to get all of them rehabbed was 50K in materials (I think we determined 4 of

them probably needed to be pulled out and trashed - #22, #1 and #2 and #8…I am going to try to

work a deal where I will give a toter 2-3 of them if he will pull my 2004 Adrian and my 1990 Cappaert

and set them up for me (as a trade) #21 I MAY be able to sell to a rehabber to live in and fix up…it is

in pretty bad shape because a tree limb fell on it and my rehabber doesn’t want to deal with the

electrical wiring that is hanging from the ceiling, etc…but maybe someone else would take it and pay

me lot rent…any advise on that one?

Oh, big question…I am resposible for the pipes for water and sewer on the property, right? (it is city

water and sewer)…I have read what you say about checking to see what the pipes are made of…no

one seems to know what they are made of…I spent the day talking to tenants today (loved it!!!) and

one told me about 2 years ago they sprung a leak and it was aweful…I am going to track down the

person that repaired that & see what they can tell me…can you direct me as to EXACTLY what do I do

to determine the condition of the pipes…ALSO, luckily they are not submetered, so I plan to do that

right away…to have the city do it - cost $600/ meter and then I would have to run the lines from the

road to each tenant…I think it will be better to install the meters myself and read them myself &


Unfortunately this lady owns multiple rental properties and the books are all kept together, so this was

the best she could estimate on splitting them:

Revenue est. 2005 - $94938 & 2006 - $75609

she broke down all the expenses for me - the totals were 2005 - $55305 & 2006 - $56545

she said that "the rev for 2006 were lower than previous yrs b/c the owner was not as active in mgt as

necessary …revs can be increased to over $100K if remodel units are fixed and mgt is actively involved in operation of the park"

The park has lots of oaks trees and they do need to be cleaned up (have not gotten an estimate on this

yet) If anyone has a guestimate on what this might run for a 2 acres property I would sure love not to have to get estimates on this…

Also, park has 2 paved roads coming in with Mobile homes on either side of two roads and between the 2 roads…they are in avg condition (the roads look older but no areas that look like they need repair)

Each mobile home has a small paved area for 2 cars to park…she has it set up so each tenant has the yard infront of their home…their backyard belongs to the person behind them…it looks like that

works out well…

Oh, there is also an old building that they are currently using for storage that used to be a duplex…it is in need of repair (roof is leaking)…it is cynder block and brick (but is has potetial to be nice…heart

pine ceilings & maybe some walls …may use one of these rooms for a coin laundry/coke machine area…or may make it back into a duplex for renting…the middle front space is vacant (#9)…I am

thinking about moving #18 there (it is very small) and use that for the office…I have a lady that I am

hiring as a on-site mgr…she will get free rent and we are still neg the rest…

We are supposed to close the first week in August so I REALLY would appreciate any input…I realize that I do not know as much as I need to know but this property just fell into my lap and I really wanted

to eventually buy a MHP but I did plan on being a little more educated before I actually purchased one!!! I do have 4 mobile homes currently…3 are rented out with GREAT tenants closer to my


2004 Adrian 14x70 3/1 is in a park (I pay lot rent of $140/month) Tenant pays $400/month and does repairs for me if I need him…(not making much on this deal…probably should not have done it

but it was my first and I was helping someone out who was having problems…he’s been a good tenant until he decided not to pay me any rent this month b/c he was going away for the month - think it will

work out ok with me buying the park b/c there will be LOTS of work for him to do!!

2004 Cavelier 14x70 3/1 (on a 1/2 acre lot that I rent from a friend for $75/m)…tenant pays $600/mo (I give a $25 disc if they pay on or before the 1st)…

and my

1999 Horton 14x80 3/2 is across the street on the same friend’s 1/2 ac lot that I pay $75/mo lot rent…tenant pays $625/mo (same $25 disc for pay on or before 1st)…

then I just purchased a 1990 Cappaert 16x64 3/2 that I will put in the MHP…

YES, the lots in the new mobile home park are small…cannot hold anything bigger than the 70’s (tight fit)

OH, PLEASE help - today I noticed that the 1964 (12x48) in the MHP only had 6 straps (or whatever they are called) so I walked around the park and looked under more & noticed that they were all that way (maybe 8 straps on the others)…so I asked the owner and she said that they are grandfathered in…is that true??? That does not seem right to me…safety is safety…she also said that “they did fine with the last Hurricane”…I am wondering if I need to have someone come check all of the anchors and straps…please advise…I could not remembered what I had read but I thought it was something

like they had to be every 5 feet…I know the MH that I already owned are zone 3 and the strap on

those are VERY close together…just thought of something else, so I need to check and see what all of

her mh are zoned for? I think we are required to be zone 2 here (can’t remember)…but I guess her’s

might be so old that they aren’t zoned for anything…HELP…it is soooo overwhelming…I can’t

wait until I feel like I know a little something about what I am doing…

I am looking forward to meeting everyone in TROY Nov 2nd and 3rd…love the BLOGS…it is

great to hear how you guys are out there doing it!!

And one more question…today I had a message from the owner of the mobile home park where my

2004 Adrian is located…she said her office had been broken into and my rent check was one of the

things that had been stolen…and could I please come in as soon as possible and bring her another

check…any advise on that???

Sorry that this is so long…I do plan to call MHU tomorrow to see if there is someone there that I can

pay a fee to advise me…but I thought I would post here also to see if anyone is willing to offer any advice…thanks again in advance!

Gelene in Mobile, AL

PS…If anyone’s advise is “Gelene, take a deep breath” I am going to be so hurt…I know this post makes me appear to be an idiot, but I promise I am not! I am just stressed to the MAX and so afraid of making a mistake BUT at the same time I really want to buy a MHP (and this one has potential to be nice BUT I do not think the price is right considering the BAD shape that it is in…I know “you don’t buy with your heart, you buy by the numbers”…the problem is there is SO much to consider when you are trying to figure out the numbers…

IF there is a law against posts this long I APOLOGIZE …I did not mean to write a book (or put everyone to sleep)…


The owner of the MHP your looking to buy has owned it for a long time so there will be a emotional attachment which each seller thinks = a higher asking price. Real estate is not an emotion game it is a numbers game, if the numbers are there then pull the trigger. If not, make your best offer and leave friends.

Do not bet on the future (nascar track), keep it in mind because of its potential for your business. There are no guarantees…do your analysis on what is on the table. You make your money when you buy real estate, get the check when you sell.


First off I only own a tiny 4 unit park (so far) But like you I am looking for a bigger one all the time. Do You work a job? Bc this property seems like it will take a ton of time. And an onsite manager is just not going to be aggresive enough. Just collecting rents weekly looks like a major headache. 23 units on 2 acres, how does the local government/Fire Department like this setup? And as always, value the land rental on cash flow, and the homes on Actual sale value. (if you were to sell it tomorrow to a tenant) Do not assume cost of anything, get at least a ballpark figure from an expert for due diligence purposes. Good Luck and do not pay a dime over what the “2nd sheet” states.

Base on 60/30 rule(income base) on 11 pads rented out of 23, the approx. value of the park is $163,200 excluding home values.

See more by searching on “60/30” and also see the link below

You will want to talk to planning/zoning departments to see if you can bring in new homes and what their requirements/rules are, are you lots big enough etc. Your occupancy rate is 48% so this seems to be a turn-around park situation.

They cost 200-300 per hour. i just did that and 1 sentence saved me potentially 50K.

The sentence is " After Option is excercised, Leassee’s have the choice of taKing legal posession with Titles and Deed, or at their own expense, form an as yet un-named Trust, place all Optioned assets into Trust and purchase a beneficial interest in subject Trust at Option price."

this is huge language…my attorney didn’t include it and I’m not smart enough on L/O to include it. This will have a very positive effect on Option for me tax wise.

That’s a lot of money to part with without another set of eyes on it.

Call me for contact info if needed.

Lonnie says you can’t steal in slow motion…this proves it!

Greg Meade

352.216.2020 Cell