Seeking Some Advice

Good morning,

I currently own a smaller (28 pads) all ages park in Northwest Ohio and have the opportunity to purchase a newer, 18-pad, 55 and older community from a relative of mine. This park was built about ten years ago, with municipal utilites and very little, if any, maintenance or collection issues. It is a really nice property, however, the Owner is a relative of mine, who has never raised rents and is firm on his price. They are currently at $155 per month in a market that easily supposts $220 - $250 per month. He is asking a premium for the property, knowing that a series rental increases can eventually support his value. I have a decent handle on park valuation and am not one to buy on potential, but I’m struggling with the decision to take this deal. It may take a few years to cash flow the asset and even longer to bring the rents to market.

Has anyone ever evaluated a deal like this or had a similar experience? Any insight or advice you can provide would be greatly appreciated. I’ve always wanted this property to contniue growing my portfolio, but don’t want to buy something simply to struggle to make my payments and operate the park.



Your relative is wrong to ask a price based on what “could be” and not “what is”.You can only buy based on today’s value and then enjoy the fruits of your labor as you raise the rents and make other improvements. That’s the whole theory behind our 10/20 concept. It is unfair for a seller to do such as thing – if raising the rents was so easy, why didn’t he do it in the first place?

That being said, you’re going to have to decide how badly you want the property. We would not do it. But everyone has their own goals and risk/reward threshold.

An alternative would be to do a master lease with option, which gives you time to raise the rents before purchasing it. We have done that before. But that will postpone the actual closing for years (will the seller go with that?).

At a bare minimum, maybe the relative would agree to having an appraisal done and then setting that as the price. Of course, this is a gamble because you might get an insane appraiser that sets the price even higher than what the relative wants. But the odds are that it will come in lower.

Of course, another option would be just to walk away from the deal. An 18 space park in Ohio is not going to be in hot demand by a mobile home park buyer, and the relative will probably come back to you later, when he gets no offers.

What you do depends on how serious a business you are running. Overpaying now for profits in the future is highly speculative and should not be considered as a serious investment option.

You also need to put aside the fact that you are related to the owner. Always place Business first.

I would make an offer based on it’s current value and wait to see if he ever finds a buyer. I would also put a time limit on that offer and tell him in the future your offer may be lower.

Or make a higher offer conditional on him notifying the tenants of a rent increase to reflect that higher offer.

Are your rent increases regulated by landlord/tenant guidelines in Ohio? If so option one is the only one I would consider regardless of how bad I might want the property.


Thank you for your counsel. You reaffirmed by thoughts. My inclination was to kindly walk away, let him try to sell it at his price, and then hopefully, buy at fair market value when he gets realistic. I would like to have it, but I’m not in the business of overpaying.

Best regards,


Given that your initials are ‘CMH’ I can see that you were born to be in this business.