I am in negotiation for a turnkey mhp. The bummer is that after spending a lot of time on this forum and researching lonnie deals etc., it seems that turn around parks are where the action’s (and profits) are at.
Of course it takes alot more time, energy, improvement money, sweat (and tears), but the rewards, monetary and otherwise, of turning a community around from the “hood” to “I would”(live there myself), seems to be worth it.
Oh, the woes of turn key investing! how boring to buy a park with very little upside potential if you’re buying at 95% occupancy. Perhaps future increased rents and the occasional lonnie deal when one of the tenants needs to move.
Any other ideas for adding value to a 90-95% occupancy, clean park?
It would be greatly appreciated, if anybody has some insight into typical CAP rates for such a park with:
70 (expandable to 74) pads
paved roadways
newer well water and sewer treatment systems
mostly newer (90’s and up) tenant owned homes
propane tank heating
under ground newer up to code electric
Park is located in upstate New York (southern tier)
your expertise and observations would be greatly appreciated,
Offer services to your residents. Here are a few ideas to get your creative juices flowing:
If the park comes with a handyman, offer his services to your residents at very attractive prices. Leaky toilets, clogged sinks, etc. Split the proceeds with your handyman. Everybody wins: the residents get fast, reliable service at a good price, you get an additional profit center.
Are the residents responsible for cutting their own grass? If so, offer to take on this responsibility for an additional monthly amount, like $15/mo. After you have enough residents signed up, hire it out (perhaps to your handyman). Now you have greater control over how the park looks, and an additional profit center.
Offer home improvement loans. Encourage residents to upgrade their homes (new skirting, central AC, new decks, storage sheds, etc.) and finance it. Make short term, high interest loans, using their home as collateral. Besides providing better enjoyment for the residents, exterior improvements will enhance the aesthetics of the park.
I’m in a turnaround situation right now. Everything will work out in time and, yes, I will make a good return on my time and money. However, the next place I buy will probably be more of turn-key operation.
Life is short and there are lots of things still to do. If the return is good, enjoy the time you have to do other things. Like buy a fixer-upper community:-)
Raise the rents little by little and pay your loan off by the time you retire. You’ll do fine.
The grass is not always greener on the other side of the fence.
well you seem to be a “go getter” but you have to understand that there are people who want an investment with a better return than their bank account/CD’s but don’t want something that is so called hands on and management intensive so id say the 90-95% occupied parks would have more than their fair share of lookers
just like anything in investing it’s a risk vs. reward and high occupancy equals lower risk, lower reward and higher vacancy equals higher reward
you just have to assess what fits you model in regards to where you are in life
at some point i’d almost guarantee, if the MHP’s still interest you, you’d be more interested in the the smaller return for much more “secure, less managment intensive” park…it just seems like the normal progession of life as you get older