The park has 20 lots total. 19 lots are rented at $175 and one is at $100 Tenants pay $13 garbage bill which is deducted out of lot rent.Park is setup very nice with a paved road and most homes are neat and well kept. All underground water and sewer is corrugated plastic lines, electric is all underground as well. Park has city water but does have a sewer plant which was just permitted for 3 more years. All was installed in 1998. Park is just outside of city limits. The highest lot rent in the area is about $255 which is in the heart of a small but very fast growing city of about 7500 population. There are a few other parks in the area that are around $150-165 and are within city limits as well. This park is not.I know there are many other things that would have to be checked out prior to making a purchase.Owner is not sure what he wants for the park and wants me to make an offer.Where should I start when trying to make an offer on a park like this?Thanks in advance to any responses, Paul McCoy.
The deal died the minute you said “sewer plant” on a park of only 20 lots. There’s no way a park that small can survive the cost of a new plant. If it was built in 1998, it’s almost at 20 years old, which means it may only have a few years left, and any future bank or buyer is going to be too worried about its future to pull the trigger. The fact that the sewer plant only has only a 3 year permit makes matters even worse.I don’t blame the seller for just wanting an offer – I’d want to get rid of that park, too.
Frank, thanks for your response. Is there “any” price that would make this park appealing ? I’ve spent alot of time researching MHP’s and still have plenty to do. I have visited every park in my surrounding area and just cant find the right one or anyone that will even consider selling. I honestly have zero first hand experience in the rental business other then helping my parents and learning from them with their apartment rentals etc. I guess my other question is that this is something that I have become very passionate about over the past couple years and am very eager to get started. would it be a bad idea in your opinion for someone without alot of experience to invest in a park that is at a great distance away? Thanks, Paul
The only thing that cures a deal like that is zero down and non-recourse seller financing. That way you have no risk at all.You need to create a bigger deal funnel. You need to hit all the on-line listings, contact every broker for pocket listings (the hottest way to find deals right now), cold call park owners, do direct mail to park owners, drop by park owners – complete immersion in deals. You also need to expand your radius. Your “surrounding area” needs to be at least 4 hours in all directions – and even farther if you can mentally adjust to that.Dave and I own and operate over 100 parks, most of which are a “great distance away”. However, we’ve learned over time that what makes a park work is not the geographic proximity to our houses, but the basic nuts and bolts of the deal. You have very little value add in a mobile home park, so you being there or not being there doesn’t mean much, as long as you are able to focus the manager on the profitability drivers.