Looking for advice on rehabbing existing park

I currently own a park in Illinois that has been built and owned by my grandparents since the '70’s. The park has been vacant since roughly 1991. There are a few old, dilapidated homes that will need to be removed from the property before the rehab work can take place. The park is currently licensed for 9 lots, but the layout is far from ideal. The park has city water and septic tanks for sewage. The plan is to clear the ground, install new water lines, and septic tanks to accommodate the added lots. With a new layout I believe that a total of 30 lots could easily be achieved in the front part of the property alone. Over half of the property is wooded, but could be cleared in the future to make room for additional lots.

The property and everything on the property is paid for, so the only expense are taxes. I was wanting to get some information on where I should even start to find investors for this type of project or if I would be better off trying to get a loan through a bank. The majority of the demolition, and ground work will be done by myself and a few colleagues to save some money. The septic tanks and water lines will need to be done by licensed professionals to satisfy the state. Any help with this matter will be greatly appreciated.

Before you spend any money on this project, you need to do the following:

  1. Look up this town on Bestplaces.net and see what the metro population (needs to be at least 10,000), median home price (needs to be at least $70,000 or so), average three-bedroom apartment rent (needs to be at least $600 or so), vacant housing % (needs to match the U.S. average) and unemployment rate (needs to be around 6%).

  2. Run a test ad to see if there is any demand.

  3. Get some comps on the other parks in the town (both lot rent and occupancy).

  4. Run the numbers and see if the economics justify the cost.

  5. Talk to the city and see if the permits are in-line to do what you’re talking about.

  6. Look at the realistic cap-x demands and see if you have the capital to complete this project, including bringing in all the homes.

My bet is that, once you run all these scenarios, you’ll realize that this deal is not very compelling, even though you own the land free and clear. Land is cheap; infrastructure and homes are not. There are plenty of good, existing, full 30 space parks out there that can probably give you a much higher return than the project you are contemplating.

1 Like

You need to pay very serious attention to Frank’s last paragraph, because I believe you’re probably about to lose your shirt. Sometimes free is still too expensive, and I can give at least 3 examples going back to the 80’s.

If there was demand, the park wouldn’t be vacant. In my experience if a property, MHP or APTs Or whatever are vacant, there is usually a very good reason, no demand. The only exceptions I’ve ever seen is when the management is utterly incompetent.

I’d do the homework in case there is something there that’s positive, but more than likely that deal is a total loser.

Find out if the land has any value in the area for other development.
Trying to turn empty land into a MHC is like restoring a old vehicle.
It will cost twice as much as you would pay to buy a vehicle that is
already restored.