Mobile Home Park Investing

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Emily Lange
  • New to Real Estate
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strategy for MHP w/ 60s and 70s POH

Emily Lange
  • New to Real Estate
Posted Jul 15 2022, 03:11

Hey all, I need some feedback. I have a seller with 7 POH (60s and 70s age) and 1 house all on one parcel. 4 mobiles rented, 1 owner occupied, 2 vacant for years,2 additional pads with water/sewer/power ready to go. 
Rents are very low ($325-550) Owners pay sewer, water, trash, lawn. So they haven’t made money on this in a long time.

1. I believe when valuing this I won’t put any value on the trailers bc they are so old? Owner has stated several times that only necessary maintenance was done, nothing more. They’re old and outdated. 

2. Best plan of action with current tenants?  My thought is purchase, increase rents and place on a 12 month lease stating the new lot rent, end of 12 months give them title to trailer and collect lot rent. If they don't want the trailer, at this point I would decide to keep or trash it.

3. I know I have to submeter water and sewer. I think best/easiest option would to be have a tenant or property manager read them each month for me? Its city water and sewer. Im not sure what it costs to have all the homes submetered.

4. Vacant homes-if its worth Reno, then find a tenant and set up as rent to own. I wouldn't necessarily want to pay to have it hauled off.

5. Bring in used mobiles for additional pads.

Seller doesn't seem to have any idea of how to value the park and she knows it needs work and seems like she will be flexible with finance terms but she doesn't want to hold for 20-30 years so it would be a balloon payment at the end. Obviously best option is zero down and save my capital for getting the park up to date and functioning better. Master lease w/option isn't feasible because I couldn't get mobiles on the additional pads until I owned the park.

Asking $235k. Im figuring a value around $196k before adding in value of the house which is older than the mobiles (which hasn't been updated at all in about 10 years).

Gross income RIGHT NOW is $29,400. I assume 40% op expenses (is this low considering the age of mobiles?) puts it around $17650 net.

What are your thoughts? Is it better to steer clear of old mobiles like this? What should I be hesitant on. Ultimate goal would be to get to all TOH or at least majority tenant owned homes.

I'm new in this niche and appreciate any feedback. 

Columbia, South Carolina

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Replied Jul 15 2022, 08:09

Look into metermaids or something along those lines for utilities. Are you looking for financing? they will value the mobile homes as 0 anyways. If it was me I would run numbers and potential of new homes. Not just hypothtical but research whether new homes would rent or sell.


Old homes are real bad

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Dave Rav
  • Summerville, SC
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Dave Rav
  • Summerville, SC
Replied Jul 17 2022, 06:18

Parks with older POHs can be a quandary. On one hand, you can usually get a good deal. On the other, the age of the homes will substantially deplete their value. Further, as someone else stated, banks will value them at 0 should you look to BRRR or refi.

I have property in the COLA area, but am based out of Charleston-Summerville.

1. I believe when valuing this I won’t put any value on the trailers bc they are so old? Owner has stated several times that only necessary maintenance was done, nothing more. They’re old and outdated. yes, good move.  Even more so that owner has essentially deferred major maintenance, which you know they have.  I have experienced this first hand, and it can be quite a challenge.

2. Best plan of action with current tenants? My thought is purchase, increase rents and place on a 12 month lease stating the new lot rent, end of 12 months give them title to trailer and collect lot rent. If they don't want the trailer, at this point I would decide to keep or trash it.  Inherited tenants can be a challenge.  Its all about whether or not they get on board with you, or not.

Gross income RIGHT NOW is $29,400. I assume 40% op expenses (is this low considering the age of mobiles?) puts it around $17650 net.  Conservatively go higher with Op Expenses.  Bound to be surprises.

What are your thoughts? Is it better to steer clear of old mobiles like this? What should I be hesitant on. Ultimate goal would be to get to all TOH or at least majority tenant owned homes.  End of the day, this could be alot of work.  I've been through similar scenarios, though not with homes this old.  I usually steer clear of homes older than 1980, as the reno can just be too much. I've seen a few small MHPs with older homes (70s), and have usually decided to pass.


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Rachel H.
  • San Antonio, TX
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Rachel H.
  • San Antonio, TX
Replied Jul 27 2022, 22:17

@Emily Lange Since the homes are old and outdated, I wouldn't put any value on the homes itself. Your plan of selling the homes to the current tenants is a sound one. Honestly, it's best to just get the homes off your hands and collect lot rent for the lots since the homes are so old. 

If they don't end up buying, you can try to find someone to take the old homes out of the park and then looking into putting newer ones in. Though, it's best to check with your local zoning department first to see if there are any restrictions. 

Also, yes look into the cost to submeter both the water and sewer. If you need someone to read the meters every month, you may want to bring in a property manager to handle the paperwork on that end. 

Hope that helps. Best of luck with the deal!