Newbie Looking at Closed MH Park

I have been looking through the forum and it looks like there is a ton of great advice here. I’d like to pick your brains a bit!

I have been a landlord, but not a mobile home park owner and would like some guidance on whether this is feasible and pitfalls I should be aware of.

There is a park that has been brought to my attention that was closed several years ago due to some issues with the septic system. Later, the former owner apparently had some issues going on and let it go in a tax sale. Now, the park is in the hands of a holding company and is being offered for sale.

I have spoken to the real estate agent who says that the wells on the property will need to be re-drilled to a deeper depth, but doesn’t know anything about the septic system. I assume it needs an overhaul, but I have no idea how much that and the re-drilling would cost.

The agent says that it is still zoned as commercial, mobile home park. I do realize that would need to be verified.

I have looked at some of the public documents online and water tests and such and I was unable to find any major issues, other than an article saying it was closed due to a “long ago” septic system failure of some sort.

There is no possibility for this park to go on city/county sewer and water as it is not available in the area.

The park is a 35 unit park with no existing tenants since it has been closed for years. The property is quite nice, almost 12 acres. Pads are in place for single wide homes, has a small lake, etc.

A friend and I are looking at this with the possibility of using about half the property as residential and income producing business/agricultural and the other half as mobile home park. I’m not sure yet if that is completely feasible, but we are brainstorming some ideas. The alternative, of course, would be to use it fully as a mobile home park, and that is also a possibility.

The price on the property seems reasonable, even for this semi-rural area (there are small cities all around nearby with decent amenities and a larger city about an hour away) and from speaking to the agent, it sounds like I could get them to come down a bit more.

I guess I’m trying to figure out if this has decent potential even with the well and septic issues that must be taken care of. And also what else I need to be aware and wary of under the circumstances.

Also, since the park is not income producing at the moment, what financing snags I may hit as well.

Asking price is $100,000. I don’t know how financing works on these things with a holding company. I am assuming they would not work with me, but if anyone has any insight on that, it would be appreciated as well.

Thank you for your help!

Here’s one way to look at it just from the park business side. If 30 trailers appeared out of nowhere. lot rents in an area like that are likely about 150 month and expense ratio around 45%, sales price offered at a 12 cap for an exit strategy, maybe more because of well plus septic. I estimate the value around 225-250k.

New wells and new septic plus holding costs alone take all the fun out of the deal plus you’ll have to likely end up buying 30-35 mobiles to get it breathing again.

This is just one way of considering it. Reality could be better or worse.

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Here is another closed park for sale http://www.mobilehomeparkstore.com/mobile-home-parks/671368-meadowridge-mobile-home-park-for-sale-in-shawnee-ok.

80 lots

Wells and lagoon

Shut down due to uranium in wells and I would assume in the biosolids in the lagoon as well.

Msa median home price is 65k

$100k on mobile park store or 60k on Craigslist

Any one have a worse deal than this?

We visited two parks for sale yesterday that should be closed that are listed on this site. One park in particular with over 125 sites was horrible with vacant rundown homes and 45% vacancy. This park was full 15 years ago and very neat. We stopped at 4 other parks we were very familiar with their history with the same issues. Within 2 miles of all those parks were newer neat apartments and also section 8 housing–is there similar problem occurring in your area??? Why would anyone choose a run down, junky, parks over newer apartments since many people are very mobile and have little interest in rent to own homes that heat and cool poorly and have little redeeming value. When we see 40 year old parks half empty that were once neat and full–WHAT is HAPPENING!!!. Half empty parks are money guzzlers even at give away prices and some are finding trying to fill those spaces expensive and a waste of time when all is said and done. Putting lips stick on a pig does not change it. Parks need to be neat, clean, safe and a plus to a city that the city is positive about!!