Making first offer...close?

Hey all, just wanted to get quick opinions on first offer on park. Here’s the info-
57 spaces
36 occupied no park owned
average rent 300pm
Property is 7 acres with 3 septic and 2 wells
Half park is master metered electric billed through to tenants and the other half billed direct.
Asking 675k
My offer conservative…
Want to keep 100k for reserves and capital to infill.
Going to offer 525000, seller offering land contract but I am offering seller carry@5% with 30 yr amort and 10 year balloon.
Thank any and all for your opinions…may have met a couple of you at last boot camp in Nashville.

1 Like

Sounds like it could be a good deal.

Hopefully it goes without saying knowing the market will be important so that you can infill the remaining lots in a reasonable period of time, and do lots of diligence on the massive septic systems and the wells (especially their ability to handle capacity when 100% occupied).

I really hope you get those terms with Seller carry, but would be surprised if that’s where you end up. Be prepared to negotiate those.

Any major infrastructure repairs to consider? What would it take to direct meter the electric for all tenants? You didn’t mention how water and gas are covered.

I didn’t see you mention a downpayment either. Zero down between 30 down would be a big difference…

Hey guys thanks for responses…

@jhutson I was hoping you’d respond because I have read a ton of forums here and you often have good insight. The park is in a 350k metro with really good schools. I will be doing test ads as a first step upon DD. Do you do them before being under contract? No major repairs that I know of yet. I currently live in NJ but I am moving to MI in month or 2 and park is less than ten minutes from my town. I am sure the seller will want to do some negotiating so I have figured in some wiggle room.

@Deleted_User_ME I was offering 10% down, sorry I forgot to include. Also have some wiggle room in that. I see you in a lot of the biggerpockets forums and appreciate your response as well. I remember you had park #4 under contract? Is that right? How did it go?

1 Like


I personally would not go for it. The septic with wells is one thing but when you stack master metered electric on top of that i think it has too much going against it and you really have to hedge with a very low price for a potential future purchaser.

That being said, the potential return is there with the 10% down payment, depending on what a more thorough look at the utilities reveals in DD.

Its got a good lot rent, hopefully the demographics are good. I know some areas in MI might be considered a buy and some would not be. So make sure you vet that.

Everything we are talking about is really hypotheticals as the seller might not even go for it since the terms aren’t very strong PLUS you are doing a big price chop. If you get comfortable with everything here, you could present the offer because that will give you a good next step . If he is not budging then you can make your decisions.


@JBush Jack @Deleted_User_ME has good advice - a Park like this is really about risk tolerance and diligence. There is absolutely a larger buyer pool for Parks on public utilities.

But on the flip side there is likely recovery on these utilities the current owner is not recognizing. I don’t know about Michigan specifically, but in Texas you can setup a utility or MUD district to recover your expenses for regular maintenance costs associated with the wells and septic. It’s not a quick process and takes ~6 months to get setup before the first bill can legally go to the tenants, but to be fair it’s not really a complicated process. It just takes government a long time to turn around paperwork.

With the increased diligence, increased management, and increased risks doing a deal like this would be a problem for most, but once it’s up and running and full would be a nice little investment property. If you’re trying to quickly buy a property and flip it after doing some simple expense management and revenue tweaks this would probably not be my first choice. This is long term buy and hold IMHO. Maybe city utilities are 5 years away from being at the street.

That septic sizing really sticks out like a sore thumb to me (not necessarily bad, just not as common in MHPs), maybe @PhillipMerrill can steer you better on it.

1 Like

@Deleted_User_ME is right on this is the market good and who will you sell to on exit.

This park has three strikes against it making your buyer pool small but that just means terms and price must be better for you and who ever you sell to.

In terms of 57 homes on 3 septic systems. Is it a tank and drain field septic type system? It is really hard to test a system when your at 37 homes and want to know if it will handle 57. General design is 250 gallons per mobile. Many jurisdictions are requiring 2 days holding capacity in the tanks so 500 per home. So you need about 15000 gallons worth of tanks my guess is you dont have it and if the systems “fails” you will have to add more tanks. You should try to simulate the flow of the other homes and see if the drain fields can handle it. Have a professional come and open the distribution boxes and simulated max flow (60 to 70 % of 250 gal per home) and see if water backs up in distribution boxes. If it doesn’t then your probably golden. If not then I would count on building new drainfields… Is there space for this and replacement of existing drain fields. Drain fields are killed by high water table, trees, and compaction look for these. Summer testing will give different results verses winter on a drain field due to water table and soil saturation.

just a few thoughts


1 Like


may I call or email you for a question that is off topic here?

Sure my email is:
phone is 503.734.7400


Thanks again for the great insights guys. I’m trying not to let “want” for my first park to cloud my judgment and I know that private utilities is frowned upon, however I’m also trying not to let the fact that I’m a licensed master plumber and have been working in the trade for over 15 years push me into a bad purchase. I’ve pulled and replaced lots of wells and worked on many septics but nothing that has 15000 gallon capacity like @PhillipMerrill is saying. I was thinking that I would be willing to wiggle a little bit on price/terms but after your various inputs may not. If, and this is a big if, the seller accepts, I will then fly out and look closer at property, maybe not even till I have a local plumber do the capacity test. Otherwise I’ll just keep lookin…thanks again guys

1 Like

Dont let private utilities scare you it sounds like you have a good knowledge base already. Im a fan of private utilities but the price has to reflect the fact that they are regarded as the black sheep of the family, have large capital expenditures, and regulatory uncertainty. If the market is solid and you get a good price and terms tie it up and do a careful job of due diligence.


1 Like

Update…seller didn’t accept…shocker! He wanted 200k down and refused to let go of title until note fully paid. Time to start cold calling.