I came across a deal for a 62 space park with no park owned homes and city water and sewer. Average lot rent is $300. Looks good. But, there are only 30 lots leased with tenant owned homes on them. So, even though there is upside in leasing the 32 vacant lots I wonder just how much trouble this would be for my first deal. I appreciate anyone’s input.
My Husband’s and my first Mobile Home Park was 22 Filled Lots out of 24 Total Lots (22 Owner Occupied Homes with 2 Vacancies).This first MHP was/is relatively easy.Our second Mobile Home Park was 30 Filled Lots out of 65 Total Lots (22 Owner Occupied Homes, 6 Park Owned Homes, 2 Investor Owned Homes).This second MHP is much, much, much more labor and money intensive.IF you have the following, I would say go for it:- Lots of CASH to bring in mobile homes- AND you desire to rent the mobile homes- AND the MHP is physically close to your residence- AND you are doing this full time - AND the numbers workHowever, if you are missing any of the above ingredients, I would recommend passing on this one as your ‘First Deal’.We wish you the very best!
I’m with Kristin – turnarounds that are based on filling lots are the most difficult of all. They can be done – and we do them frequently – but they are extremely capital and management intensive. If you cannot commit the cash and time to make it happen, better to stay away from that business plan.
I think I can find a better deal than this. Thank you all for the input!
Hi Kristin, Just Curious to know, that if we pay only for the 30 occupied lots, how different it is from your first MHP with 22 occupied lots. If possible we can try to fill in for additional income, if not what is specific to lose? Your advice is highly appreciated. Thanks
Puppybright, you are correct that if you are only paying for the first 30 occupied lots then the remainder can be additional income.Since my Husband and I purchased a very low occupied MHP in February 2014, we are not opposed to this strategy.I just wanted to highlight that this MHP will not necessarily be as ‘easy’ as other MHPs with higher occupancy rates.However, nothing in life is necessarily ‘easy’. As per Thomas Edison:'Opportunity is missed by most people because it is dressed in overalls and looks like work.'If you are ready, willing and able to work, please go forward.Please just note some of the following:1. Lawn Maintenance: You will need to pay for Lawn Maintenance on all the unoccupied lots.2. Water: If the Water is Master Metered (the MHP gets one bill for everyone), you ‘might’ have to pay the Water Company based on the Total Number of Lots that you have (not based on the Number of Lots actually using the water). This is generally not the case (as our MHP is Master Metered but we are billed based on usage), but does occur in some areas.3. Loan: Getting a Loan on the MHP based on the percentage of occupied lots ‘might’ prove difficult. However, if you start knocking on the doors of Local Banks, you should find one or two willing to loan you some moola.4. ‘Exit Strategy’ - Ability To Resell: If you are not able to fill the unoccupied lots and need to sell the MHP, you ‘might’ find the MHP difficult to resell.There are trade offs in life.My Husband and I were willing to accept the above items when we purchased our second MHP with low occupancy.Please just hone into what is most important to you in terms of purchasing a MHP and then be willing to pull the trigger when you find one.If you can get this MHP for the right price, /and/ you are fully aware of the hurdles, /and/ are you are willing to accept the hurdles, please put it under contract asap.If you put is under contract please just make sure that you have lots and lots of contingencies to get you out of the contract (if need be).We wish you the very best!