I am still in the due diligence phase of purchasing my first mobile home park. My question is this…Is there some kind of inspection where an inspector goes around the property and inside POHs to make sure everything is up to code? Perhaps something similar to a home inspection but for parks? I know I can get different inspectors to look at different aspects such as plumbing, electrical, etc., but is there something more general I can have done to help eliminate any bad surprises? Thanks in advance for the help!
First, don’t buy a MHP without attending bootcamp.Second, your diligence on the real estate is much more important than your diligence on the wheel estate. That said, definitely get inside all vacant POHs. They are almost certainly vacant for a reason. I’d worry less about the ones generating an income (rented or on RTO). They are (apparently) in good enough shape to generate an income. But get into as many as you can.Also really find out what the seller does to screen tenants. We purchased a park where the seller never checked backgrounds and never took a security deposit. As you can imagine, many of the homes were trashed - certainly once we started enforcing NPNS and they began turning over. We purchased another park where the seller had extremely strict requirements for his tenants and they all were putting down at least $2,000, some as much as $5,000 - and those homes were in terrific shape. Finally pay attention to the seller’s Repair & Maintenance costs. If the seller has high standards for his tenants, he may have very low R&M (perhaps 20% of revenues). If takes anyone into his houses, he could have R&M that is 100% of his rents (tenants tear up homes as fast as he can repair them).So get into as many of the homes as you can, and then make an educated guess about the rest based on the condition of what you’ve seen, the competency level of the seller, his background checking rigor, and his repair and maintenance costs.Good Luck,-jl-
Jefferson, Thank you for the advice. I have been into all of the POH’s already as part of my personal inspection of the homes and the property. The only vacant one is being updated with new flooring, paint, windows, etc. I’ll have to look at the R&M on the expense report but I don’t recall in being too high. There are no security deposits but all leases are on a month-to-month basis so that could easily be changed. The condition of the homes indicated the owner doesn’t have much of a problem with the tenants destroying the trailers (he tries to get older tenants for this reason). Thanks again, appreciate the help-Mike