I am a new investor looking at buying my first park. I can’t go to the boot camp because of a schedule conflict, but did buy the audio mobile home millions IV ( haven’t got it yet)
I am in New yorkstate and want to purchasee a park here. a few questions.
How far away from your home is “too far”, especially for a new investor with another full time business.?
Most of the parks I have looked at have septics. Are septics a deal breaker? I see many investors don’t want a MHP on septic.
Most also are on well water. This concerns me since they need to be tested each day and are subject to inspections by the state health department. I would not want to have a problem with the water.
Again, most parks have both well and septic, so I must not be that bad, Correct? any thoughts would be helpful.
Last, what is a reasonable cap rate. Most of the financial information I have seen is flawed. It shows lots of income and seems to leave off expenses that I know will be incurred ( auto, legal, adverstising, repairs and maintence are just a few)… I am a cpa so I can look at the numbers and figure out the ommissions and overstatements.
If a seller is asking say $400,000 for a park with $31,000 of realistic annual cashflow, I think it is over priced by about $100,000. Am I crazy?
I would want at least a 15% return (cash on cash) or even 20% for the risk and hassle. Is this unrealistic?
Your Mobile Home Millions IV audios are on the way!
How big of a MHP are you looking to purchase? Is it turn around (less than 80% occupied) or turn key (more than 80%)? How much time do you have to dedicate to the park? How much money do you have to invest? Do you want to be the manager or have a good full time onsite manager?
These are all questions that you will need to answer in your mind to determine what type of mobile home park that you are looking for. With a full time job, I would go with a smaller park that is “turn key”. If the mobile home park is within 30 miles you could self manage… if greater than 30 miles I would have a good onsite manager in place.
Sewer systems and wells are popular in many parts of the country. They are definitely not a deal breaker by any means, I would just be more thorough in the due diligence process. With sewer systems you want to make sure that the sewer is not being used by too many homes to create issues.
I like to buy mobile home parks on cap rates of 10 - 12+ with upside (i.e. vacant lots, rent increases, etc.)
I am also a new investor looking to buy my first MHP and I saw your E-mail dated 09/04/2006. I am looking at New York and Florida. I live in Long Island but I also spent a number of years in Florida. I would very much like to see how you are doing with the parks and any insights would be appreciated.Thank you.
