Hi all, I am looking for my 1st MHP. I found one in my city; however it’s extremely run down that it looks like a slum. Homes are built in the 70s. I think most of the owners are farmers from another country. There were no major upgrades for years. They are all tenant-owned homes. Given the condition, if I want o clean up, it will take me 2-5 years. If my goal is to own an MHP, I will buy it. But my goal is to retire from my current work in 2 years, and I don’t see that will happen if I purchase a park like this. I appreciate any advice.
The learning curve on distressed parks is steep. I’d say this would be like just getting your medical degree and choosing a brain tumor removal for your first surgery. You might be better off finding a park that looks a bit rough - and thus isn’t crazy expensive - but really isn’t too bad and can be upgraded with reasonable experience, cost and effort. Knowing you are working full time still is another reason to avoid the full time job managin a truly distressed park.
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I haven’t purchased a first park yet however I have been in real estate a long time and I will just say that depending on the beholder’s eyes, the words “extremely run down… slum” can have VERY different definitions depending on the individual.
This “run down slum” definition for some can mean single wide homes that simply need to be pressure washed located in a park with GREAT infrastructure and city utilities but has tall grass growing, overflowing garbage, older cars, and dogs and cats running around everywhere. Someone else might not touch what they would call a “run down slum park” with GREAT infrastructure with a 10 foot pole because the homes are models older than the year 2000.
When looking at parks I channel Frank and Dave and let the type and condition of the overall park utilities and lines, roads, number of and condition of park owned homes, rehab costs, condition of trees, etc, etc, etc dicate my park grade.
Keep us posted on what you decide to do!
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email me the details and we can discuss some options
mhpquestion at yahoo
I agree. I don’t want to bite off more than I can chew. These are the pictures; hopefully, you can see them. I also found out there is a felon in the park. The sheriff’s report indicated some drugs and other activities are going on. I am not sacred of reno the beat-up homes, and it’s the people I do not want to deal with.
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Thank you for your advice. I am contemplating whether should I go forward with it or not.
The two photos don’t look bad. Call or email me. I would love to hear all about it and connect with another female investor!
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I would buy a run down park depending on the price. I would expect a much higher cap rate on a “slum” as you called it. Keep in mind that the turnaround will be difficult because unless you replace the tenants, they will be used to the conditions and perhaps they see nothing wrong with it.
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Hi Ashley - there’s two competing thoughts to me. 1) Perfect is near impossible to find at a reasonable price, and 2) Everything about a park matters - location, infrastructure, # of POH’s, tenant base… It’s hard to tell a great deal from the pictures other than the homes are older and have add - ons. That mostly suggests lower income tenants. Lower income tenants are generally less sophisticated with fewer options. Like every type of tenant base, they have their benefits and drawbacks.
As for tenants with felonies, the type of felony matters. Some felons can be quiet easy tenants because they know if you evict them, there are few other places they can go. That said, if they have a felony battery, sexual assault, child sex offense, or felony drug distribution charge, that’s hard to live with and you likely need to non-renew their lease when their lease expires. Problem tenants will consume an inordinate amount of your energy in a park.
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Your battles: people with long term habits. they have lived like this and done whatever they wanted for quite a long time. You will be looking at taking them to court to get them to shape up. You will have to watch your back. Are you alone? Husband and I bought a park, went in and told them there was a new sheriff in town. We were quite successful in cleaning it up as far as people. But some people still don’t understand maintaining their property and following rules. It will be a challenge. Are you going to live on site? somebody has to so you know whats going on. Actually, I am overwhelmed, since my husband died, so I am selling. Its too hard to do it all by myself, and I have a great maintenance guy here…
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Instead of extremely run down, i would look for an older park that just needs some love. It ifs extremely run down, how do you know the condition of the water lines, sewer lines, etc?
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Feel free to reach out: JohnM@TerraGroupProperties.net. I had purchased and am still operating one like this, although markedly improved, and can tell you what I regret doing and what I’m glad I did. It can be fun and challenging at the same time. But there’s also inherent risk. All the best.
Is this the worst of it?
Doesn’t look that bad to me.
The top photos has an illegal front porch/awning. That’s a clean up notice.
The bottom photo shows an illegal cabana/enclosed porch. Not to big of a problem.
I suggest finding the local codes that apply. Hand the codes to the violators and say “the enforcement agency is coming out in the next 60 days, this better be fixed before they get here”. Let them know that it will be way easier to comply with your “Friendly” requests than to deal with Code Enforcement.
Without a complete picture of the deal it’s hard to say what you may be getting into. PM me if you need some guidance.
AW
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Depends, at least to me, how much it is. The first park I bought was a fixer upper, but it was close enough and a good enough deal for me to take the risk. I sold it 18 months later for double what I paid for it.