First time investment- 4 unit mini MHP

7 Replies

Hello,

I have an opportunity to purchase a piece of land that has four mobile homes on it, all single wide.  Each unit is metered & the tenants pay electricity, heat/gas & trash collection.  Owner pays water, which is sourced from a well.

Performing the analysis, based on the list price, the cash flow is $340 /mo. This accounts for 10% each in vacancy, CapEx, management & repairs. I haven't toured the property yet to understand what repairs may be needed.

My question to you guys - am I able to perform my analysis the same way on a 4 unit mobile home property as I would a SFH or a MFH, or will I be missing a critical piece of information. I am effectively just using the rental property calculator.

This would be my first investment, I’ve been scouting and analyzing properties for several months, this is the first in my area that actually comes out positive without having to reduce the purchase price significantly.  I really want to get my feet wet, but I am unsure if this type of property is a good one for a first time investor.

I appreciate your feedback,

Andrew

Hi Richard,

The homes are “park own”, though it is less of a proper park and more of a piece of land with 4 homes on it.  The combined rent is $1,900.  The tenants are all supposedly long term.  I am in Michigan.

My primary goal is to buy/hold to generate cash flow. The property is located close enough for me to maintain, so I may be able to increase the cash flow even more by saving that 10%.

My understanding is that the repair costs on mobile homes are much higher than a normal stick built home.  

How much are you paying for these?  What’s the local market for lot rents? Can you turn them to lot rent units and maintain the tenants?

At $1,900 a month it how much after mortgage and expenses and headache will you generate in cash flow?  

It has 4 units on it.  Can you add more?   How about just giving the units to the tenants and change it to a lot rent play?   I like simple and I like neat.  Park owned homes don’t sounds like either.  Just my two cents.  

Account Closed

Average lot rent around here is between 300 & 400.  The property itself is under 1.5 acres, so there is not significant room to expand without acquiring the surrounding properties.

The current $1,900 would bring in around $340 CF, this accounts for 20% down conventional, with 40% set aside for repairs, CapEx, management & vacancy.

This would be my first investment, so I appreciate the suggestions.  I will have to talk with the current owner to attempt to understand roughly what the repairs have been & then I’d be able to understand if the reduction in income would offset the reduce maintenance cost moving to tenant owned.

Thanks,

Andrew

Originally posted by @Andrew Russell :

@Eric C.

Average lot rent around here is between 300 & 400.  The property itself is under 1.5 acres, so there is not significant room to expand without acquiring the surrounding properties.

The current $1,900 would bring in around $340 CF, this accounts for 20% down conventional, with 40% set aside for repairs, CapEx, management & vacancy.

This would be my first investment, so I appreciate the suggestions.  I will have to talk with the current owner to attempt to understand roughly what the repairs have been & then I’d be able to understand if the reduction in income would offset the reduce maintenance cost moving to tenant owned.

Thanks,

Andrew

At 400 each that’s 1,600 which would be more profitable if you didn’t need to worry about repairs or anything else  at 300 it’s less but you get to not worry about any of the repairs which is worth it in my opinion.  

    Without seeing the layout the idea that 1.5 acres of land couldn’t fit in at least two maybe even four more trailers should not be out of the question  at 6 that’s 1,800 for lot rent and you could buy two comparable or slightly nicer ones and be able to do a rent to own for a 5 year loan of 200 a month on top of rent to get you even more profits   

It’s all about options   

What’s the purchase price?

 

Account Closed

The layout is awful, the four of them are all diagonal, near the road, so they are blocking the road frontage.  Not well thought out.  I don’t know what it would take/cost to move them on the property, but at least one would need to move to gain more access to the rest of the land.  I will have to investigate.  Great suggestion, thank you!

Price is $60k.

Andrew

Originally posted by @Andrew Russell :

@Eric C.

The layout is awful, the four of them are all diagonal, near the road, so they are blocking the road frontage.  Not well thought out.  I don’t know what it would take/cost to move them on the property, but at least one would need to move to gain more access to the rest of the land.  I will have to investigate.  Great suggestion, thank you!

Price is $60k.

Andrew

Oh nice.  PM sent