Would you walk away from this

mobile home university
1

I have a park under contract in east Texas that could has potential upside, but could be hard to fill.

43 spots
17 occupied (13 homes, 4 permanent RV’s). I’m not sure if I count the RV’s?

Average lot rent for the homes is $250
RV’s pay $350

I’m valuing the park around $300k.
He’s asking $220,000, which makes it very cheap.

Here are the problems that I can see with doing Frank and Dave’s due diligence

  1. In the local town, houses are around $30-40k
  2. The large metro area is 25 miles away and already has mobile home parks around it renting sites for $250
  3. It’s on septic and one leach field has failed.

Any advice would be appreciated. I’m experienced on renting houses. This is my first step into MHP.

-John

2

I would likely run not walk. $30-$40k SFH is an extremely difficult to near impossible market to make a park work in. Then to top it off it sounds like the lot rents are over market, and the price isn’t even that good.

1 Like
3

Thank you Noel. I appreciate the feedback.

4

This is screaming to understand the demand and why the Park is 40% full. Rents too high, town too small, etc? There is a good price for Parks even with conditions like this. It might be 75k to make sense, but that’s part of the magic in this business.

Most would pass but I would consider at the right price.

5

John,
Prior comments agreed with but to be fair, why don’t you run a test ad in CL just to confirm these thoughts? Its free, its actual data for your analysis and its free.
Most likely it will confirm what everyone says or maybe it will surprise you. In all aspects of analysis, more data is better.

6

Hi Howard,

I ran CL and a local paper. I received about 1-2 phone calls per day.

Reading on the forum, I’ve seen that 4-5 should be what I’m looking for.

Thanks for the suggestion.