Hi,
I’m new to the forum and new to the notion of investing in mhp’s. I live in CO and looking to buy a mh property in AZ. It has only 2 mh’s a fixed structure and 1 RV spot with an 11% cap rate. My question is, is there such a thing as a MHP being too small to be a worthy purchase? The concern obviously is how the loss of one occupant can drastically affect cash flow. Not only that, upon resell, would this type of property be attractive to a broad market?
Thanks.
That’s just too small, in my opinion. The smallest park I ever bought was 15 lots and Dave’s was 10 lots. Neither of us liked those deals too much. The smallest thing gone wrong will destroy your numbers. And those small parks are very hard to finance or sell – you might be stuck with it for life.
Of course, I’ve not seen the deal and the location. But, just on size, it’s not attractive.
@hrw , as per your question:
- “Is there such a thing as a MHP being too small to be a worthy purchase?”
For a MHP you want to have ‘economies of scale’ for the number of MHs in your MHP.
I agree with @frankrolfe that:
“That’s just too small, in my opinion.”
Now I do understand that everyone has to start somewhere.
Also, you are in CO and there might not be a whole lot of MHPs to select from.
If your budget is limited, I would look for a newer, single wide on some acreage (1 acre or so) physically near you.
You could eventually sell the single wide /and/ land to the renter or just the single wide.
This would at least get your feet wet in the land of mobile homes and renters.
If your budget is a little greater, I would also focus on just a MHP with only mobile home spots (no fixed structures and no RV spots).
We wish you the very best!
I also live in Colorado, and for me that is too small. I thing 35 pad sites is about the smallest you want to go if the park is out of state. Nice thing about Colorado is, we are direct flights to almost everywhere.
I have a 14-space park east of Tucson which was in due diligence until the buyer had some financial problems and had to back out. If you’re interested, shoot me an email at
and I’ll send you an information packet.
dave