I am a newbie and need some advice please


I am about to take my first plunge into the trailer park world and need some advice for my first deal. Here it is

Trailers are all park owned and are all in great shape and rented with long time tennets that are all on month to month currently. Here is the break down. 12 pads 7 with trailers rented and 4 homes rented and 2 duplexes for a total 15 units and $5240 in rents. Rents have a history of being paid by the first of the month via mail. The rents range from 325-370 for tailers 300-325 for duplexs and 410-525 for the homes. 5 more tailers could be added to existing pads and the rents can all ceritainly be raised by at least 100.00

I am trying to calc an offer price for all this. Please ask me more questions and help me learn this business. If I bought this I already have a property managment person that manages my 24 apartments that are in the area. I also could use the same trades people to effect repairs.


Good to see you are out there looking. I would initially look at each property as individual income producers.

Only you know what you are willing to pay for an income stream. As a seasoned apartment owner, I would think you could figure out the individual home and duplex values to you, based on their income.

The trick to trailers is not to base the price on the income. Go out and find some comparable parks in quality and determine the going rate for lot rent and base your purchase price of THE PARK on that. THEN determine what you would pay for each trailer if you were to buy them right now, as is. Most old trailers are worth very little unless you are on the left coast. They increase in value by age and condition. There are numerous other issues associated with a park, no matter what size.

On the park:

How old is it?

How old are the water pipes?

What is the septic/sewer situation?

How many Amps are the pedestal boxes?

What kind of heat and A/C do the trailers have?

Are the lots big enough to bring in 16 X 80s or doublewides?

How much does it cost to upgrade a pad and transport and set a new trailer?

How much can you buy used trailers for in your area?

Will the local authorities allow you to bring in ANY more homes?

What are the local requirements to bringing in new or used homes?

How many dead tree branches are there?

What is the condition of the road?

What do the locals (not the residents) think of the park?

Any recent infrastructure upgrades you can talk to the contractor about?

What part of the world are you in?



Thank you very much for responding.

I am in Bozeman Mt. and the property is in IL

I calc the ROI to be 23% pre depreciation. That is fine for appartment deals I do but Mobiles homes are new to me and I an not sure of the formulas to evaluate it fairly. The four homes in the deal are easly worth 25k each and I can boost their rent to 650. I also figured the duplexs to be worth again 25k each. That gives me 100k for homes 100k for duplexs and 30k for 8 trailers and 4 pads. For a total cash offer price of 230k.

The water and sewer are city. The road is good. The trailers are in great shape all two bedrooms with central air. I had my property manager already walk each one and take pictures.

I am getting answers to the rest of the questions you posed to me.

What do you think so far ?


So far, the deal sounds good. Most investors today give no value to the empty pads because it is rare for any trailer owner to bring a trailer into your park. Any value in the pads will only be realized when you spend the $$ to bring in and set up homes (if the municipality is cooperative).

City water & sewer is the holy grail of MHPs. $30K for the park with 8 good-condition trailers would be an absolute steal.

Without actual expenses in hand, separating the trailers from the dirt, I estimate:

Assuming good quality 1980s trailers @ $2500 per = $20K for the 8 trailers

Assuming $200/mo lot rent X 8 payors = $19,200/yr. minus 10% delinquencies and vacancies = $17,280 minus $35% operating costs = $11,232 net. $10K for the park ($30K - $20k for trailers) with a $11,232 net would be a tasty ROI.

The avg trailer rent (above lot-rent ) is $147.50/mo X 8 =$14,160/yr. minus 10% vac. & del. = $12,744 minus 50% operating costs = $6,744

Total net = $17,976 or 59.9% ROI if my calculations make sense. That’s great BUT these are truly DEPRECIATING assets and will have to be replaced at some point, depending on age. New ones are $23K+.

Depending on actual expenses and other park-related issues (as outlined in my previous post), your mileage may vary.

Carry on, Andre,



I calc that my annualized net flow to be 52,593 or 23%

I also calc my yearly cost for Insurance, taxes, property maint, garbage, security light to be 10,287 per year.

I am not sure how to figure deprecation with these kinds of assets. Are mobile homes treated differently than appartments ?

It seem it would make sense for me to allocate a larger portion of the purchase price to the actual mobile home than the land itself for deprecation purposes.

I was told today that in Il they are going to rase the yearly tax on mobile homes from 80 to 500 per year ?

very good analysis of what he would offer for Park… I’d offer the same less 6 grand. I would offer 24K for this Park. Steve highlighted the ParK I am gonna ask a few questions about you lol:

  1. do you have experience running a MHP? with this small of a Park there is NO money for a fulltime manager

  2. Do you want to live in Illinois? You are sure in a cold area now in MT.

  3. What is your plan? Flip it for cash? Note? hold and rent? L/o? (lease option)

  4. There are killer deals in Idaho with HUGE Parks. A lot closer, eh?

I’ve owned a few smaller Parks and they can be very labor intensive Andre and this translates into "Work for YOU! LOL. I would look at the demos of this Part of IL at:

Look for a large city nearby, college, emploment, unemployment, etc.

Steve hit all the biggies on Park I am trying to see if you are willing to move to a different State that is mucho different from Bozeman. I lived in Post Falls ID for many years and LOVED Missoula…the first place I ever saw chewing tobacco tin marks on young GIRLS back pockets. Went elk hunting near Flathead Lake and these two 20 year old girls wore me out . Our only way in was horses= sore back. OMG. I was in leather dress shoes and 10 inches of snow and I had to walk out my horse was loaded with meat. they laughed and laughed and said I’d never want to party with them for a weekend again and they were abso right. I realized women are dangerous when they shot, killed (with one shot), skinned, deboned and wrapped a 3 point bull elk in 5.5 hours…guess who packed to horse? Yep. And they cut the liver in thin strips and BBQ ed it over a fire…(if I’m lying I’m dying and washed it down with Everclear. )OMG! Back to MHPs LOL

I’d start small and start smart…IL is a long way away and if you can’t steal it …pass. Sounds like a J-O-B.

maybe read Lonnies book Deal on Wheels and maybe actually do a few before jumping into a mobile home niche. get some education and post more often. This sounds like a great deal at 24K (or 30K) but I can’t find any more value here unless pads rent for 1K each per month.

This is just my humble opinion…wanna find a copy of Lonnie Scruggs book? Call me. Andre if you have questions 6AM - 6 PM EST is only time to get me live

good luck to you,




Thank you for responding and nice to meet you.

The “Deal” is for 230K. The mobile homes are just a part of the package. There is four homes and two duplex also to be considered. I have 25 doors already within 30 minutes. It was my property manager that brought this deal to me. So he would be the one managing it not me. He has been with me for a year now and has over seen the complete remodel of a 12 unit complex and its complete lease up in less than eight months. And while doing that he helped me accuire a four plex and an eight plex. All cash flowing nicely. I am very happy with him and have no plans on moving to Illinois myself.

My plan is to hold and rent with an eye to L/O. I have several homes in GA that I am going to try and L/O and see how that works. I just got nine of them in the last 90 days and had them rehabed.

I would love to hear about “killer” deals in Idaho. Drop me a line or two about them.

I am not looking for a “JOB” I had one of those before and not looking for another one. LOL

I married a gal from Bozeman. I lived in Branson MO prior. She does is not as tough as the girls you mentioned but I have seen girls like that here. Everybody is tough in Montana if they have lived here for very long it seems.

I would love to read and learn more.

Thanks for your input and I will try and give you a call.


the absolute truth In MHPs right now for me is:

  1. It has to cash flow large from day one.

  2. For me to acquire it has to be a STEAL


  4. Owner terms with no recourse(happens all the time here in FL

  5. Has to support a full-time manager even if exit strat is flip

  6. Motivated Sellers

Maybe IL is mucho different from FL but here Owners are willing to share the pain… A Park in Tallahassee sold on terms with 5% down, 15 years fixed at 6% and Owners paid closing, survey, and appraisal! The Park cash flowed 6400 per month (after all expenses including debt service) on lot rent alone and there were 11 singles 96 and newer included with seasoned L/O Notes cranking out an additional 2700 net each month…there are 6 empty lots and I am working with new Owners to fill these.

Or look at Rick Ewens deal above…This is a fantastic deal and you only need one of these to retire large.

It sounds like you have money and/ or investors and smart money right now is still in stealing deals. And when I say smart money I mean Microsoft. google and Warren Buffet. They are all buying competitors and expanding portfolios in these times. Warren is last man standing in mobile homes and financing.

Georgia is a major manufacturer of mobile homes and the States output last year was the lowest since they started tracking em in the 70s I believe.

HUD homes in my County routinely sell for 14-22% of face value outstanding mortgage default.

It is all about what you require for return…if you are happy with a return of 26% on 230K outlay go for it…make sure of expenses and ask for 3 year tax returns detailing this property’s actual numbers… i would not shell out 230 cash without a more superior return…I would have investors to pay and still make some money myself…this seems lean to me. The Owners in Tallahassee shelled out LESS than what you are forking out in IL.

This Board is about sharing ideas and there is no right and wrong.

Food for thought Andre nothing more, nothing less,



Depreciation of rented MoHos is discussed here:

This is an older post so you may want to contact John directly through his site here:



Wow $24K? Are you figuring less for the standing MoHos because their ROI is significantly less than renting the dirt only? Of course we don’t have comps on lot rent in this case, so who knows? If all went well, which it usually doesn’t in a park, at $24K you’d have your money back in 16 mos. Sweet.


I don’t put a value on any mobile over 15 years old. when I say is cash is king I mean it.

I have invesors that will only lend at 18% now and want full recourse unless they are majority owners in the deal. This is expensive money and so far I have declined the use of these funds. Property values both in residential sales and commercial are still falling and I can’t see an end in sight here in FL.

I don’t care whatthe pundits say, we are in a depression here. Ocalas uno is 15% but the true uno is at least 9 points higher…local power companies are LOWERING rates. Folks are voting with there feet and the first question on rental ads I run is who is electric provider? What a year can bring…first time Progress Energy has EVER lowered rates here in Florida.

my neighbor just bought a home I bid 140K for in 06 and LOST (sold for 157K) for 38K and Saturday when I mowed his 5 acres fenced and with a barn he told me he paid too much…the next highest bid was 17K.

People here are getting rich here on buying these deals and there is no end in sight.

My problem is I can’t generate much interest in investing in a L/H pac when a HUD REO sell for 1/2 of what I need to prosper.

cash is King here as is cash flow (thanks Rick)

Tough environment here and my biggest competitor is HUD and fannie, etc.

There is almost an endless supply of reo homes here…at current levels of purchases almost 4 years worth!


Cheese and rice, Greg - - - I oughta exercise my life’s dream now and buy a place in Florida - my first love at 5 was the WeekeeWatchee mermaids. I still remember the orange groves along the side of the road while driving, and the smell . . .

Post Edited (12-04-10 05:33)