How much do you value the finished lots?

I am in the process of evaluating a park in Texas. It’s a Turn-key park for sure, is in a great condition. I know we do not put any value on empty land, but they have lots of finished lots (separated water and electric meter, everything is ready to go). How much per lot do you value, $2K, 5K or higher per lot? Thanks.

It’s still zero for me. Turnkey parks don’t have lots of empty pads.

The park value is based on the income it generates not the improvements to the dirt.

Anything more than that is goodwill.

Since a mobile home park is an income property, you can only value actual income, and vacant lots not only don’t produce income, they actually cost money, so they really have a negative value… However, sometimes you have to stretch to make a deal work – but hopefully not too far or you’re better off not buying it. If the market is great, you should have no problem filling vacant homes (but you should verify that with a test ad during due diligence) – but you’ll still have to bring in the home and that’s capital intensive and risky. If you have to fill two lots or so to hit the seller’s number, then maybe you would do it, but not if it’s 10, 20 or 50. When I say “to hit the seller’s number” I mean hitting around a 8% to 10% cap rate with the current NOI coupled with filling maybe two lots maximum. But even then, don’t make that stretch unless the park has something so strong going for it that it justifies the gamble.

A much better way to bridge the seller’s number is through a rent increase. That costs nothing more than stamps, or by sub-metering water and sewer, which costs around $300 per lot.

But I can’t emphasize enough that you really should be valuing the existing income stream, and all of those items should be your upside for making those strategic improvements.


To tag onto Franks post of Capital intensive, my park is a major turnaround, but with huge upside. It’s not actually that far from the Orlando boot camp, I’ll probably go to the bootcamp for at least a couple of days.

I paid nothing for the homes, but they still cost me money, a lot of money. I’m spending an average of about $4,500 - $5,000 so far for home rehabs per home, and we’re doing the easiest ones first. Now we’re selling the homes for an average of over $8,000, the highest so far is $10,000. We are increasing prices as the park improves and the reputation of the park improves.

So great, I’m making a killing right? No - I’m getting an average of $1,500 to $2,000 down on a rent credit, so I’m in the hole about $3,500 per home from the outset.

Now $3,500 X 70 homes, you do the math, it takes a lot of capital even when the homes are “free”.

Why an I doing it? Because using conservative math, I’ll increase the value of the park over $1,500,000 over the next 3 years, and up to $2M in 5 years. The other reasons are 1. The demand in this area is absolutely outstanding, we have several homes sold that we haven’t even started to rehab yet. We just show them the end product and they buy from us, even though the park down the street is giving homes away for $2,000. Yes, even “trailer park people” can recognize and appreciate value vs price. 2. It’s Florida, finding opportunities like this isn’t every day, although I’m 4 for 4 in buying low and doubling my money down here, it CAN be done. The other properties were duplexes and condos.

When people complain about our price being 4X the parks just a couple of blocks away, we tell them fine, go down there and check it out, they come back. But we turn away most applicants, fortunately we can afford to be very choosy with the unreal demand we have.

Frank runs a very grueling schedule at the camps, but if there’s time I’d be happy to show anyone my park as well. It’s about a 50 minute drive is the only issue.


Coach are you in Ocala? I have a few parks there.

No, on the other coast in Brevard County. I looked in Ocala, couldn’t find anything that met my needs.

BTW, I will not be able to make the bootcamp, I have a prior commitment that I wasn’t able to move.