Looking for partner and help analyzing deal in Florida

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:

  1. 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.

  2. 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.

  3. 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.

55 x $275 x 12 x .7 x 10 = $1,270,500. The park is worth $1,270,500 plus the value of the homes. So if the homes are worth around $5,000 each, the numbers would tie. But even if the numbers work, I have a few concerns:

  1. not a big fan of the 16 RVs being treated as MH. Not sure your appraiser, bank or future buyer will agree with that theory.

  2. I don’t know the laws in that state, but generally you cannot charge more than the utilities cost, except a small administration fee in some states. That concept is probably going to have to be ended if you buy it.

  3. My value above was based on 100% of the homes being occupied, not with 8 vacant. But you’re claiming that those are ready to go, so I’m trusting that.

Sounds worthy of putting under contract and doing more due diligence on overall.

I would definitely want to see 3 years of tax returns as to his gross income and what he expensed. The sites that have RV’s on them what size mobile would fit on those sites plus what is the average size of the lots with 55 spaces on 3.73 acres. It sounds like a very old park and the AGE??? of the homes are ???. As a side note if a multiple park owner is selling a particular park there is reason to believe he is selling this one because??? I always kept my best and sold my worst–just my experience.

Thanks, everyone, for the replies.


  1. You used $275 as the monthly amount for all 55 units. Only 9 of the units are at $275. The remaining 44 (2 are rent free) average $500 per month. So am I wrong in assuming the formula should be:
    9 x $275 x 12 x .7 x 10 = $207,900
    44 x $500 x 12 x .7 x 10 = $1,848,000
    Thereby putting the value at $2,055,900?

  2. The seller charges a $10 admin fee for each meter.

Carl - The RV’s are 5th wheel RV’s that are permanently there and rented. The slots could accommodate a single wide MH should we choose to replace the RV’s.

The park and the homes are older, no doubt. But they are also rented right now.

I don’t have a 100% answer as to why he is selling. But I can guess that his bank doesn’t want to lend on another park. So he has to sell the park in order to get the other one he wants to buy. And he is very cheap, so I would also guess he doesn’t want to put the money into fixing the citations.

Are the homes that are “tenant owned” owned out right or on a “rent to own contract”?

The tenant owned (not sure the correct terminology) are MH’s that are owned not by the park. They are owned outright by the owners who pay $275 a month for a slot.

BTW - I have no problem flipping this deal to someone and being your eyes on the park if someone decided they wanted 100% ownership. The experience I would get from working with someone to analyze the deal, analyze the process and learn the business would be invaluable.

What also scares me is most of the homes are park owned. He owns 2 other parks in the area. He could sell to you then take your tenants to his other 2 parks. The homes are likely so old that the repairs and maintenance would eat the profits. In my opinion (which isn’t worth much) I would walk. If he can covert them to tenant owned that sweetens the deal.

Can you please explain to me how tenant owned sweetens the deal? I’m not understanding that. Tenant owned pays $275 a month for the slot. Park owned gets $500 per month. So you are losing $225 per month per slot - correct?

If they are park owned you have way more liability (repairs, calls to fix stuff at 3am, ect). If they are tenant home all you have to worry about is the lot rent.

One of the primary advantages of owning a MHC is the low maintenance costs associated with only renting and maintaining land. If you own the homes you are no longer simply a MHC landlord you are now a building owner. Maintenance costs are considerably higher and the likely hood is that in the long term you will be spending far more in maintenance costs than you are making in rent. Mobile homes are rented at far too low of a rate to make any profit after maintenance. All of your efforts go toward simply making the lot rent so there is no point or profit in owning the home and 10X the work.
If you want to own stick and mortar get out of the MHC business and invest in multiplexes. With that investment your equity in the property increases in value over time rather than decreases in the case of a MH.


Can we discuss over the phone?


Just read your very interesting post and was wondering if this deal worked out for you and whether you are still looking for a partner?

Thank you!