In Fill Project

What would be a fair price to pay for an empty park? This would be a complete in fill project and would take capital to buy homes, bring them in and sell / rent them to tenants.

  • Park has city water and sewer.

  • Park has no gas, just water and electric. Each lot individually metered by electric company. Water is master metered.

  • Going rate for lot rental in area is $200 - $250 with parks paying for water.

  • Number of lots is 54.

Also, city requires wind zone homes of 2 and 3, so may be a little difficult to find used homes to move in. May have to buy new from Legacy to get that type of home.

Demand seems to be good in the area.

I know this is an expensive endeavor, so curious as to what you guys would value the dirt and utilities at.

First of all, make sure that the city still considers the park legal conforming or non-conforming – and not plain illegal. Many cities consider the use abandoned if there are no mobile homes in it (although the real interpretation is supposed to be that abandonment occurs when you stop advertising or answering the phone). If that’s the case – and they won’t get on-board with a call to the city attorney – then you may have to battle city hall which, although you might win, will be extremely costly and probably a deal killer on a deal like this.

The other major consideration is if you really want to do a deal like this and why. You are going to be putting a conservative $25,000 per home blended average, which is over $1.25 million in homes. You will be completely upside down in the park until you get those sold and paid off by the home buyer. There are plenty of great deals that already have stabilized or near-stabilized occupancy that will have higher return numbers, a fraction of the risk and effort, and can be financed by a bank or seller (homes really have no lender out there, nor does an empty park).

So while I have not doubt you can do this deal – my question is: why would you want to?