I am trying to figure out what to do. Here are the details.
I was in a serious car wreck and have permanent back injuries from it. I am still able to work but not as long if it requires a lot of bending. I let my park go when I was really down and now the cost ratio to the income ratio is just a break even situation. I do not and never have had persistent crime problems. I move them right on out when I get one and that is why I still have tenants that have been here for over 16 years.
I have other income so this park doesn’t need to make money but if it doesn’t why keep it. There are 28 spaces on a very large tract of land with with asphalt or concrete parking slabs along with a asphalt road with concrete shoulders. The park has separate electric and natural gas meters. I have a mater meter for the water but do have a sub-meter set up for the park so I can bill tenants based off their water usage. A complete water system with curb meter box pits, Badger 25 meters, lock out valves, customer pit with brass ball valves and the EPA required Reduced Pressure Zone Valve was installed in 2010. Sewer is a self contained lagoon system and other than some fence upgrades needed around the lagoon the sewer system is in excellent condition. There is plenty of land for expansion and it is all unrestricted. There is a park owned Ditch Witch trencher. The city road that crosses my frontage is newly constructed concrete that was done in 2012. All the city water mains that were in the construction area were also replaced at that time. Water pressure is 78 psi at the high point of the property. There is two fire hydrants on the property. One of the fire hydrants is located in the center of the park and fed by a 6" main line. Water supply is not an issue for future developments and I hold a Purchase Water System license and all the required permits from the State of Oklahoma.
I pretty much emptied out the park so upgrades could be done. There was 17 POH and I sold 14 to be moved and kept 3 that I sold retail with owner financing. I am way too cheap on lot rent based off the local market. One side of my park is tight to put an 80’ trailer on while the other side could accommodate anything that is being manufactured. Minimum lot width is 50’ and some wider because of tree locations.
I am in a city of approximately 50K with a major university. A new state of art elementary school that is less than two miles away is under construction. A Walmart Super Center is about 2 miles away. City is beginning to boom again and trends show that it will continue with the multimillion investments that are coming to the community.
Now the question and request for your opinions? After a good clean up how would you go about rebuilding my park?
I am up for ideas. Anyone have anything to share?
There are some smart and well experienced people on this site so share some ideas.
I did this and it worked for me…
Stay away from this because I made a mistake…
Food for thought…
Maybe if you were to…
Have you done …
I have read many of the threads and am considering buying the book. Did the book help you?
Ring those bells and chime in.
Before you do anything to this park, you need to see what the realities are with your lagoon system. What will it cost to replace it down the road? How many years of life does it have left? The other big issue is the cost to bring in the 25 homes you are missing. It is unlikely that you will fill any of those lots unless you bring in the homes yourself. At around $20,000 per home on average, you’re talking about pouring maybe $500,000 into the park to get it full. Add the cost to re-build the lagoon, and you could easily hit $600K to $700K. Once you bring in the homes, you’ll have to hold the park for probably 10 years to pay off the home mortgages (which, under the SAFE Act you can no longer do mortgages, but will need to shift to rent-to-own or straight rentals).
Once you risk all that capital and time and effort – even if the deal goes perfectly – you’ll have a 28 space park in Oklahoma, which is not going to garner a lot of buyer interest. Additionally, it will be hard to find a buyer or lender with a lagoon.
If it were me, I’d put it on the market to sell it as is, where is, and let somebody else take on such a project. The risk/reward does not look compelling to me. That’s why we stay away from deals that have huge amounts of vacancy (50% occupancy or less), unless the existing numbers at the current occupancy are so strong that there’s no need to fill it quickly.
But that being said, it’s your park and you know a whole lot more about it than I do, so your gut instinct will be way better than mine.
Well… without knowing a whole lot about your market this is sort of a shot in the dark…
If the market is somewhat strong, I think you need to take a good look at what you bring to the table, and what your missing. Your post says your tired… so lets just go with that for a spell…
You have the asset and are then looking for someone to come in with some capital and skill sets and bring your park up to speed. That can be done a few ways. Lets say you still wanted a skin in the game, then maybe you value the park as is, bring in a partner and find a way to split up the upside once they have managed to bring in the homes etc. You can divvy that up lots of ways, depending on who is bringing in equity etc…
You could lease / option the park to a very qualified operator. Now you continue to receive the benefit of payments over a long term, but you do not need to worry about any of the day to day stuff.
So the books… you are looking at a pretty narrow segment of the business in pulling in homes and selling them. I am not sure which book I would recommend. The concepts of the 10 / 20 book are good to review and keep in the forefront of your mind, but your really looking for skills and concepts directed to filling your park. The bootcamps touch on this, but not in any sort of depth. So if your doing it solo, you might hire someone to consult with.
Like most park owners, I infill my parks from time to time if homes pull out or get destroyed. I have been very creative in partnering with used mobile home dealers to get homes pulled into our parks. While I can do this, and have become pretty good at it, it is still my least favorite way of adding value to the community as it requires so much capital to pull in homes.
Lastly, I think I read a number tossed out for what it would cost per home to fill the park. I can fill most spaces with a home, tied down, skirted and ready for people to move into for under $10,000. I am picky on the buy side, I pay spot cash and am always keeping my eyes open.
good luck!
There are more than three homes in the park. When I said I got rid of 14 that was POH not tenant owned homes. I wish there was only three because it would change everything.
I don’t need an investor since I can fund what ever I need. The lagoon is plenty big to support all the homes and was designed for 72 homes. It is also possible to tie to city sewer but at a high cost. Lagoon is state certified and inspected yearly. Should need be there is plenty of land to build a second lagoon and the major cost would be engineering and state approval. It is something I would buy my own equipment for construction for if I had add an additional cell. Equipment is something I don’t mind owning and I have some large equipment but not a dozer. This land is a huge tract with only a small portion of it being used. Lagoons are still common in Oklahoma. Most small towns still have them.
I have considered the idea of dealing with mobile home dealers and offering a partial down payment rebate once the lease is signed and home is in the park to qualified people. I know all the dealers in the area. That would be easy and so far the best idea. If there isn’t decent priced spots for buyers to put their homes then the dealer doesn’t sell as many homes. This would be a win, win, win situation for all three parties.
I am not really interested in owning rental homes so I will have to get creative in attracting homes. Many parks are way over priced in the area so taking tenants from them is always an option. If it wasn’t for the love for my tenants that have been with me so many years, I would shut the park down and move everyone out. Those people are my extended family. I want my land but not the park anymore.
Selling the property would be easy even with the lagoon because there is a shortage of land that is for sale in large tracts in the area. Location, location, location. Trouble is I like my property and it isn’t replaceable in the area so I don’t want to sell it.
“I have been very creative in partnering with used mobile home dealers to get homes pulled into our parks.”
Please tell me more about this process.