My husband and I are considering investing in a small mobile home park. We have allotted about $30,000 for this use. We have had some email correspondence with Frank and he has said that we could afford a park that costs no more than $150,000. We would need to look for a park with about 15 lots at a 10% cap rate. We were told it would be difficult but not impossible to find.
We are concerned that we do not have enough money. We are thinking that during the buying process and directly after the park is bought there will be many other expenses and we will not have the money to make it work. We are having a hard time making a decision on whether or not to move forward. We own our home and we know what a money pit it turned out to be so we want to proceed with caution.
Perhaps, think about waiting till you have a larger down payment and really some experience so your fears are less or at least try some hands on experience to see if that is really something that could develop into an enjoyable business for you. You might seriously ask yourself WHY do I really want to own a park???
Hi Carl,What sort of downpayment would you suggest for someone wanting to get into the MHP game. I own a triplex and am really interested in this type of real estate.I am not risk adverse. I know that improving a property is what makes it more valuable…so I too am interested in your advice.Thanks!
My first park of 235 sites was bought 40 years age with $10,000 down. Sold it 2 years later for a $150,000 profit. The first year I was the mule and learned down to earth information from the owners that has proved very valuable. The park is just north of the park listed for sale on the Park Store on FM 1016 south of Mission, Tx. There is not much completion for parks less than 40 spaces but a smaller park does not give as much return when selling since the future owner has little down payment also. We have bought only one park from a large corporation and prefer to buy from Owner-Operators and some time I will explain why. We have one park for sale ( over $3 million) but hate to sell since it has a 35% return that is not possible with most other businesses Hope I have been helpful–find an owner operator that is retiring that is willing to guide you.
That was my thought as well, to wait until we have more saved. We also wanted to take the boot camp course to get more knowledge. As to why we want to own a park, as an investment and a business that I could run from home while I take care of my children.
Please note that if your own house is free and clear you can borrow against it. I saw this in a recent thread, maybe a week ago or so. However, I personally don’t agree with this plan since it puts too much, in my opinion, at risk. It might be better to borrow against a whole life policy, if you have one, or to sell personal assets such as an extra car or motorhome or boat if you have ony of these things. Borrowing against your 401k/401a/403b/457 account is not a good idea either in my opinion. If you save more and plan more the process will likely be smoother. For tips on sound money management see Dave Ramsey’s Financial Peace plan. He has a ton of sound advice and a great story to back it up.