I am a little frustrated because most of the parks that i have looked at have quite a few POH’s. Are there parks out there that are lot rent only parks that you can buy at 10% caps? with seller financing? I live in the carolina’s and most of the parks i am seeing have half or more POH’s in them. I own another business that takes most of my time, but I want to get in the mobile home park business on the side. Based off what I have read and posted on here, if you buy a park with POH’s you will have a lot more maintenance and headaches to take care of even if you have maintenance man and manger. Do I need to look at bigger markets with lot rents at $300 and above? will I have to get bank financing to buy bigger parks because most of those sellers will need cash?
If I buy a park with lot rent only, will I have to buy at 7-9% cap rates with very little cash on cash returns? On the recent deal I looked at, with seller financing with 52 out of 83 POH’s, the broker told me that i would be missing out on the deal of the century. He said i would be dreaming if I expected to get a lot rent only park at 10% cap and good cash on cash return. He informed me that I would be have to buy at 6-7% cap with about 10% cash on cash return. is he right?
Thanks for your sharing your thoughts and opinions. I have studied the books, listened to the cd’s and will be attending bootcamp in september in charleston.
Frank - do you have a park in the carolina’s you would like to sell?