I found it is hard to buy parks with city water and sewer with good price and cash flow. Some parks with private water and sewer look really good in numbers. Lot of times sellers even offer financing. Do you think are they worth to buy?
One of the first things my mentor impressed on me was: city water, city sewer.My brother owned a motel on well water. He called me once in frustration as the local well-drilling company kept drilling, at like $100/foot, and found nothing. I’ve read stories of folks spending hundreds of thousands of dollars repairing/replacing their septic systems. I wouldn’t go anywhere near it, and I think that’s the opinion you’ll hear here, unless you’re very experienced and knowledgeable about private services, and have the deep pockets to maintain them.dave
The vast majority of parks are on well and septic. As with any business there are costs that simply need to be factored into the equation. You can opt to pay more up front to buy city services or you can pay less and budget for the normal ongoing expenses of your business.It all comes down to due diligence, determining what you can afford to pay to go into business and balancing risk verses reward.Compare it to buying any product, a car for example. If you have lots of money or are prepared to saddle your business with a larger loan you buy new off the lot. On the other hand you look at buying a vehicle a couple of years old. You pay less going in or have smaller payments knowing that repair costs will start sooner. You can afford to put money aside in preparation for the expense. Every investment vehicle has positive and negative aspects depending on the perspective of the investor. Old building, new building, upscale, low income, condo, single family, multifamily, mobile home park, RV park. Every income property has a owner. Making or losing money depends on how good you are at business not what type of property you chose to invest in. If as a investor you are risk adverse invest accordingly but be honest with yourself in realising wealth through real estate is a long term investment with both ups and downs.
Thanks Dshinnick and Greg. Great answers!