Forgive me if this post is too long - I want to give as much info as possible.
We are looking at our first mobile home park. We are experienced rehabbers and also have over 15 years experience managing rentals, namely apartments. I have an investor friend who only does mobile home parks. I know he owns at least 3 parks in Pasco County (I verified through property appraiser’s office) . He has an unadvertised park that he is looking to sell for $1.5M in Dade City, Florida. He wants to buy another park with the proceeds. He has owned the park since 2008 (I verified through court records).
The seller owns the 3.73 acres that the park is on. The land is included in the $1.5M sales price. There are 55 homes total in the park. Of the 55 homes, 46 are park owned and 9 are tenant owned. The 9 homes that are tenant owned are charged $275 per month and each slot is filled. Could easily be $300 per month. One of the park owned homes is for the park manager that gets free rent and $350 a month. Another of the park owned homes is for the maintenance guy that gets free rent and $150 per week. Of the remaining 44 park owned homes, there are 8 vacancies. But when we were looking at the park, 5 of the vacant homes were being repaired for rent so they will be filled by the time the deal closes. The park owned homes average $500 per month rent. Also, of the 44 park owned homes, 16 are RV’s.
Each slot is sub-metered for water. The seller reads the meters monthly and charges an extra $10 over whatever the water usage is. The park has city water and sewer. No septic. Each slot pays their own electric. There are 6 roads in the park, two owned by Pasco County and the other 4 owned by the park.
Just a quick glance at his spreadsheet shows the following for the first 3 months of 2015:
Gross Receipts - $19,545.57
Operating Expenses - $11,425.08
Net Income - $8,120.49
Gross Receipts - $24,403.66
Operating Expenses - $11,849.35
Net Income - $12,554.31
Gross Receipts - $22,341.69
Operating Expenses - $11,442.78
Net Income - $9,898.91
Part of his operating expense is a mortgage for another park that he used this park for as collateral. I don’t know exactly how much that is.
The seller is close friends with the bank that funds his mobile home parks. The seller believes he can help us get 75% financing ($1,125,000) since our credit is so good. So we have to come up with the remaining $375K through possible investors / partners. The seller wants a refundable $15K earnest money deposit before he will open up all his records for review. My sister has been a financial controller for 30 years so she would be looking at the records with me. We are both very, very detail oriented and “seeing is believing” type people.
Some sub items:
I believe the seller is somewhat of a cheap landlord. I think someone told on him to Pasco County because suddenly he got citations in about 30 homes. My business partner and I looked at the citations and they are minimal. Things like needing a screen on a window, cranks for some windows, a couple of stoves not working - all very minor stuff, especially for experienced rehabbers like us. I would estimate that it would take maybe about $25K at the very most to fix everything.
The park sits on 3.73 acres just off a main commercial street. It is far enough back off the street. There is a lot, lot, lot of development in the area. A new Publix just went in within walking distance. Major road expansions of roads leading to this main commercial road. There are 1.72 acres of vacant land just in front of the park that borders the main commercial road. Rumor is the owner is asking $1M for that land. I believe this mobile home park could be sold in several years to a developer.
The seller is willing to stay on for free and guide us through the first year of management.
Anyway - if anyone has an interest in investing / partnering or wants more info, please contact me.