BiggerPockets

I found an ad for a MHP in SC at another REI Forum, this is the ad:

" We need to move this property so that we can invest in another opportunity. It's a Mobile Home Park in SC. It needs some work but has the potential to bring in about $3k. It has some cash flow now! Here are the details:
will Finance....No credit Check, No qualifying
Purchase Price: $95k Down Payment: $3500
Monthly Note: $995.00
We will do this under a lease purchase.
We NEED to move this and close on it no later than two weeks "

I wrote with the seller and its an 8 space park with possible 2 more. 7 spaces with park owned mobile homes (rent $350) and 1 vacant space.
3 of the mobile homes are rented, 4 vacant. These 4 mobile homes needs approx $5k for repairs. There is a waitlist for the vacant homes said the seller and the lease time is for always for 1 year.
GI is $29,4k with 100% occupancy, the NOI should be $17k.

Is this an rentable MHP? The price is negotiable and the monthly lease rate too.
If I buy the Cleveland Mixed Building I still have some money for that scenario. Only these properties be 600 miles apart.

-Uwe

Uwe, I think it certainly presents a good possibility. In running the numbers it looks like the Note is written at 12.75%. I would bet, based on their motivation level you can improve on what they are asking in order to enhance the deal for you.

Also, what research have you been able to do concerning the area, and other factors like:

1. How long have they owned it?
2. How much land does it include?
3. Will any of the monthly lease pmt be credited to you toward the purchase?
4. Will they turn over to you their waiting list of potential renters?
5. What is your long-term strategy for the park? Hold, Fix-up & Rent, or Hold, Fix-up and Sell via owner financing? You could always sell the seller financing if you decide to "cash-out" completely due to the distance.

Just a few thoughts. Hope this helps. Take care,

BTW, where in SC? I previously lived in SC a number of years and continue to do investments there.

I really should clarify I buy these parks and rely on how well they do to life on... so these are investments and income...

There are two parks for sale in Peru Indiana, $60,000 down and they have a NOI over that $60,000 mark... I think they are offered at a 19 CAP. They have owner financing, non recourse financing, fixed for 10 years and then a small bump for the next 5 years...

They are listed by a real estate broker in Lafayette Indiana... Metropolitan Real Estate I think... I think the broker is Charley Caufman... It was still listed a few weeks ago... Sub-meter water, allocate trash and it goes over a 20 CAP... anyway... there are lots of great deals out there...

Uwe, I've never bought a park, but I've done some serious due diligence on three of them, so I have advice from experience.

Most important, is the park on sewer or septic? Septic systems for mobile home parks can be a serious problem, and have to be investigated carefully.

Call the local police and find out what the crime rate is inside the park. I thought I'd found a good one until I discovered that the police averaged 6 calls per week to the park, all of them for serious and often vilolent crimes. I figured it would cost too much to clean the park out and build it back up to where it was paying again.

I had to reject another because the fire marshal informed me that I wouldn't be allowed to make even the most minor changes to the park unless I brought it up to fire code. Current fire code required 2 entrances. The highway department said no way on earth would they allow me to cut another driveway into the highway.

The last park fell through because the owner had leased a barn to a car repair business and refused to allow me to do an environmental survey. I didn't want to get stuck with paying to clean up 50 years worth of oil, anti-freeze, and diesel spilled directly onto the ground.

P NW, why don't you buy liability insurance only for your depreciated mobile homes?