Sewer/Power hookup inspection? and acquiring more MHs

I’m an aspiring MH park investor/oner and am under contract in Alabama to buy a 40 unit park. Only 12 spots are occupied (non-POH). My goal is to own at least 20 MH in the park within the next 2 years. Slots rent for $150. Single wide MH should pull $450-500 depending on size, age, etc.

Since 27 spots are vacant, how would I go about making sure the sewer, water, and power hookups are “ready for use”? The park is on city water/sewer. FYI

Also, Any advice on acquiring used MHs to help populate my park are helpful! i.e. Where to find, whats the longest you’d pull one for relocation, etc.

Thanks! Looking forward to learning here.

You need to buy the MHU Due Diligence Manual. It tells you about scoping out the utilities to ensure their current condition prior to purchase. This includes things like running a sewer cam down the main lines, checking with the city on the status of utilities / processes for direct sub-metering if applicable, power providers about process to get a new meter loop, power pole, or whatever else needed for a home occupying a vacant lot.

For used mobile homes there is craigslist, direct mail - tons of threads out there already on this topic. Some people pull these things hundreds of miles because there are so few in their area - it really depends on the supply.

Also get comfortable with your market. Filling 27 lots in a year is pretty aggressive and the demand needs to be there to do this. Set your expectations reasonably unless you’ve already got a crew ready to rehab these used mobile homes. Do 5 in year 1 as you build your crew, then ten in year two, and the rest in year three - unless you have tons of cash and a smoking hot market then okay you can do it faster. You’re going to be doing this yourself of have an amazing management team to assist? It sounds easy, but getting these filled with the right people takes time.


thanks. to clarify, i’d like to hit my goal in 2 years, not one. but point well taken. this is a fairly rural area but with city utilities and county schools systems I think it will be very desirable. The park is 30+years old but previous owner got wealthy on other interests and let this go to pot. Someone tried to buy it over the last two years but couldnt pull through… but in the 2 years he spend a lot of time and money pulling out old trailers, cutting down trees, and cleaning up the property. it is a blank slate now other than the 12 lots i mentioned.

I’d budget about $10k for each MH acquisition. Hoping to find on Clist and other online classifieds. Also working with some local MH lots that can point me to trade-ins and we can work out a deal with each other.

I’m hoping to have someone on site as manager/helper but have the time to do it myself in the near term. Until rent roll is stable and cash flowing I’ll keep both my eyes on it, though.

Should I worry about water hoarding and putting in sub meters for the water? Worth it?

I’m under contract to pay $4,000 per site. Sound like a realistic number?

A big under-tapped resource is Facebook. For instance, I currently have a 1998 Double-Wide under “contract” for $6,000 and I have a place to put it… The community yard sale pages on Facebook are a great resource. Also, direct mail and/or energizing a local lonnie dealer are also great sources for getting homes.

Expect to be all in to a mobile home for 8-12k. This is assuming you are involved heavily in the process of finding, negotiating, arranging transport, renovating, and selling. If you put someone between you and any of those processes, your cost will go up some but it may be worth it. Depends on your situation. Also, this figure is assuming you create deal flow, are involved somewhat heavily, and can get a good deal…FYI Your situation requires a lot of deal flow so you better figure that out if your budget is $10k per home.

Put the sub-meters in. I’ve read plenty of “great” things about RUBS, but I prefer the sub-meters personally. My opinion, probably worth it.

Your $4k per site (or $160k) seems pretty high to me. You have 12 x $150 x 12 = $21,600; I’ll say you’re at 50% paying for utilities so your NOI looks at best $10,800. If you are paying $160,000; you are technically paying the seller for upside. Now, my tune might change if you tell me demand is great and the market is $225+… AND, seller is carrying the paper with decent terms.

1 Like

I suspect your 160k purchase price is more about the land and improvements with this low occupancy than the value of the business. This is a common challenge and the economics really need to make sense. Have you done your test ad yet and how were the results? I will give you a buffalo nickel if you can fill it (with tenants) in 12 months. :wink:

Agree with Charlie on the submetering - water consumption goes down ~40% or more on average with it in place. It also enforces good tenant behavior in general by making them responsible for their actions.

You will fine tune your infill price per home as you get your contractors lined up and do this several times. The first couple will be more expensive than the ones after - that’s the educational value and is normal. This price will also be influenced by the amount of site prep needed. If these vacant pads already have meter loops, concrete pads, sewer lines, and roads going to them then obviously 8k is doable, otherwise it could cost a bit more. Hopefully this is outside city limits where requirements would be less intrusive?

Thanks for the replies…

Test ads starting soon. Again, this is a TWO year goal to fill, not one as referred to above.

Submeters— check!

All but maybe 2 pads are prepped and ready just need to keep grass down until a home is on them.

MH repairs (POH): How much do you budget per year per home for repairs and maintenance? Toilets, windows, faucets, etc. Whats a rule of thumb?

This is outside city limits (but on city utilities which is awesome!.. sits about 100 feet outside city limits but they ran the pipes anyway to the park many years ago).

That close to outside city limits public utilities is common - mostly called the ETJ where the city will eventually annex. Typically there is a 25% surcharge on water / sewer as it’s an extended service area - not a problem just an FYI.

POH repair cost will depend on how many you have, your strategy, age of the homes, etc - lots of variables. If your manager is also handy you can work up a deal to do this on the cheap if you supply materials. If you hire it out on a work order basis to a plumber, electrician, etc then the costs go up significantly. On this forum the common strategy is to offload the POH to tenants to become owners using various programs (covered extensively in the MHU Due Diligence Manual). I can tell you both parties that do this are very polarized - some can make renting work and it fits their business model, and others have been severely burned renting and won’t do repairs to minimize risk and smooth their revenue stream. It just depends what works for your situation.

Yes but I guess what I’m asking is how much do you budget for repairs/service calls per year per unit? MAny people assume MHs are pieces of junk that fall apart at the seams. My MHs will be at least ten years old. A big part of this is the tenants, but again I’m wondering how much people on this forum that actually own the homes will budget per year for repairs. Whoever replies can state which cost cutting strategy they are using in that respective park.

We do not “budget” for home repairs. Rentals are not a plus, but have turned out to be necessary to fill lots for the lot rent value. In our experience, home rental income is approximately equal to rental expense. Home rental income is the total rent minus the lot rent that a homeowner pays. The homes are only worth what you can sell them for to a homeowner who will maintain the home and pay lot rent. Homeowner expenses in maintaining the home are less than renter expenses because of attitudes, quality of resident, care of home, and prevention. A homeowner usually takes care of a little water leak before it damages the home.

The cost cutting strategy is to turn rental units into owner occupied units. If you cannot do that, valuation of the park decreases and aggravation increases.

1 Like

I did what you did 10 years ago with a half empty park. Bought homes from closing parks and moved them over. Was about 23k for double wides and distance. Full park with 75% POHs. Good money but we pour money back in to keep those homes ‘right’. Pure maintenance is about 15-20%

Have fun and good luck. You sound excited which is fun to experience with you.

1 Like

thanks propboy… you mean “pure maintenance” as in your operating expenses are 15-20% of revenue? or do you mean just the individual home estimate is 15-10% of the monthly rent/revenue? i.e you rent a home for $500 so you budget up to $100 per month for repairs/service calls???

Sorry Skip for not getting back to you… we have a 20 space park; fully occupied; 14 POhsand 6 TOHs (we prefer to have a mix as it improves the cash flow while keeping a solid base income). Our homes are early 80s double wides and mid 90s single wides. We take very good care of our homes and park in general. We keep them well maintained. Our pure maintenance against our total revenue is about 15%. Most of that cost is in replacing decks, patios, sub flooring and wood siding on the mid 90s single wides. We have all four seasons at out park and the T11 siding on them is a bugger with the composition wood trim. Wish they were all the metal double wides…