Hello all… first post here. I live in West Palm Beach, Fl and looking for a park down here. I only have about $50k to put towards a park so I have a few questions:
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Would it be better to purchase some older, less expensive homes that are already in a park, then rent them or finance them to potential buyers?
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Is it good to purchase a small park for starters (maybe like $150k or less)?
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How hard would it be to do seller financing with little money down?
Any information would be greatly appreciated!
Thanks in advance,
Nick
You want to be in the land business, not the house business. Buy a park - ideally with few park-owned homes. If there is a bit of vacancy, maybe you can save some of your money to bring in a few homes to fill vacancy.
You will be looking for a smaller park given your limited down payment. Smaller parks are often overlooked by many investors. Any seller of a smaller park will have fewer interested buyers. Be persuasive and persistent in your deal-sourcing (online, direct mail, phone calling, driving the speed bumps), and get one at a decent price (10%+ cap rate on land-only) with seller financing. ‘Bond’ with the seller; get him/her to sell to you on favorable terms.
You’ll be off to the races.
-jl-
Thank you for the quick reply! I am very interested as I just got laid off from my previous job - I am a pilot. So I am looking for something I could do even after I get a new job. It seems I have a great job to coincide with a MHP.
When you say 10%+ on the land only, how would one determine only land value? Because most of these parks all have POH’s.
Well the first thing you should do is buy the books available for sale on this website. Then the second thing is you need to come to the next bootcamp (details should be up soon on this website).
But rule #1 of this business is you value the land separately from any mobile homes that come with the park. You have to figure out how much profit the land makes and apply a reasonable cap rate to the earnings from the land (say, 10%), and then add the value of any POHs (park-owned homes) to come up with a total purchase price for the MHP. But the POH value is just what they are worth based on what they can be sold for in that park on a note, not a 10% cap on whatever income they generate.
But get the books, then come to the 3-day bootcamp, and you’ll be ready-to-go.
-jl-
Full Disclosure: I receive no compensation from anything sold on this site. Unfortunately.
Excellent, will do! Thanks for information…
Looking at a park with tenant own homes, so lot rent only. 28% vacancy rate. Net income $26k. Potentially $26k. What worries me is lot rent being raised in a few weeks, BUT park owner will start to pay water/sewer and garbage. I don’t think that’s a good idea, but I don’t own a park and I haven’t done TOO much reading, so what do I know. Any instant thoughts that come to mind? Thank you in advance!
Nick