New Park expansion economics quandary

I have a 150 site MHP community in Ohio which I have only initially developed 10 sites. I have filled the 10 sites and are ready to start the next phase of 40 sites. However, the engineering group which I am using to update the permits is indicating that my construction cost is going to be over $60,000 per site. This seems economically infeasible. This is over 200% higher than my initial construction cost. My engineering group could be slightly off in their numbers but not enough to justify the expansion.

Does anyone have any insight? How can anyone make numbers work at this cost?
I have always thought that a fully approved MHP is extremely hard to find today and valuable. Am I missing something?

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Construction is expensive!

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I’ve never done it, but doing site work with a new concrete pad and utility lines in my area runs $15-25k and that’s with roads and utilities in place… you’re adding new roads and presumably water/sewer lines (maybe even wells and septics) so $60k maybe isn’t all that crazy.

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But the FED says inflation is mild!

I’m doing this same thing in Maine right now. Existing 22 lot park is full and I got approved for 31 more lots a few years ago. My initial estimate from an engineering firm was $2,700,000 to build the 31 lots ($87,000/lot +/-). Obviously not worth it. Then I started working with a very good contractor who loves his work and happens to share some mutual friends with me. He quoted me for about $1,500,000 after he spent a few weeks looking at ways to value engineer the expansion. Now we are about $48,000 per pad and that includes all the work to tie into my existing park’s infrastructure, replacing all the driveways and roads in my existing park, and replacing my existing force main that failed the pressure test, and all materials, labor, equipment. I’m a construction manager anyways so I’m buying out all the materials directly which eliminated mark up on those which will save some money too. The numbers at this price make sense but its still expensive in my mind. If you find the right contractor and figure out some ways to save money without cutting corners I think it’ll go a long way. Plus if you infill with the CASH program remember they’ll finance the concrete pads into the home sales so you don’t have to include those in your construction budget. That’ll save you a few hundred thousand right there.

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Hi, I am curious about your contractor, would you share their name? I’d like to do something in Maine, but just getting oriented to the business. Thanks!

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Pass.
I think you will be better off buying a known performing asset than building this park out.

I am doing an expansion on one of my parks. We are looking at $350k for the grading.
$500K for the septic system. $500k for the water and electricity. $300K for paving and landscaping.

I estimate we will be at $60K per pad once complete. The only reason I am doing it is that we already have 91 spaces paying rent. So the rents will cover a lot of the expansion. So far I have spent $200-250K all from Rents. If I had to put up my own money it would have passed.

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