Brewton, AL · Member since 2013 · 16 posts · 5 votes
I am considering developing a mobile home park and putting it straight on the market. All infrastructure in place. No mobile homes setup. Looking for opinions for this approach, particularly from those who have actually seen this done. TIA
Investor · Provo, UT · Member since 2016 · 759 posts · 626 votes
2y
I would strongly suggest finding a park that is already in service. Unless the land is especially valuable you will probably lose money because in states like Alabama, I doubt you could build a park for what you could get an existing one.
As far as marketing I think it is possible that someone with a few parks already would be interested even more so if they are set up with some of the factory programs.
Investor · Provo, UT · Member since 2016 · 759 posts · 626 votes
2y
I would strongly suggest finding a park that is already in service. Unless the land is especially valuable you will probably lose money because in states like Alabama, I doubt you could build a park for what you could get an existing one.
As far as marketing I think it is possible that someone with a few parks already would be interested even more so if they are set up with some of the factory programs.
Investor · Clairemont, CA · Member since 2011 · 3k+ posts · 2k+ votes
2y
Search some past posts on developing a MHP. I won't go as far as to say it can't be done, or hasn't been done recently...but the economics and regulatory hurdles in the US today make it very difficult to do so. You'll see that many parks were developed prior to the environmental regulations today, and I can't speak for everywhere, but in areas I'm familiar with the water/sewer/fire/road etc design standards make the site work costs too high to work for MHP typically.
Brewton, AL · Member since 2013 · 16 posts · 5 votes
2y
A few things to consider for my situation: I own the land out right. The site has power and public water. I'm a licensed civil engineer and land surveyor with experience designing these parks. This part of the County has no zoning and zero regulations, with the exception of the health dept for the septic systems.
So, my question is not so much about does the numbers work, as it is regarding finding an investor that would be interested in purchasing a newly developed park. I really don't want to get into filling the park. Just build it and sell it.
Specialist · Austin, TX · Member since 2017 · 137 posts · 109 votes
2y
To me, there is always a buyer out there IF the location, cost, size, utilities etc. match what's in their buy box. The buyer's price vs your sale goal may or may not align of course. If you can put out more information that could better guide a potential buyer, that would not hurt. Currently it may be a bit too much of the ether level to get much specific input yet.
Investor · Upper St Clair, PA · Member since 2013 · 96 posts · 112 votes
2y
Listening to Frank Rolfe's opinion on this topic is interesting. Are you looking at this from your buyers prospective?
* This likely isn't bankable so it's a cash/seller finance transaction. * The buyer is going to have to fill the park. Cashflow will be low until it's significantly full. * They can't pull their money out via refi until it's bankable. * (I believe) new home prices are near historical highs. I've *heard* new homes have stricter/costlier installation requirements. That's likely dependent upon AL laws, but potentially another obstacle towards you or your buyers goal. * Filling parks typically is a costly and time consuming process. * New parks are rarely welcome in areas ( by municipal leaders and residents) unless it rural. If it's that rural, does the demand exist? * Municipalities frown upon parks due to the lack of tax revenue and cost (school district).
These points are counter to a existing park that likely is bankable or closer to it than an empty park. Basically, all the risk without the upside of existing tenants. Maybe your location is unique or demand is thru the roof, but this is food for thought on the paradigm.
I'm curious about your thoughts on this response. I love the idea of developing a park myself. I don't know if it's typically a good financial decision. Let us know how it goes!
Brewton, AL · Member since 2013 · 16 posts · 5 votes
2y
Patrick, you bring up some good points, particularly the potential hurdles the buyer might face with getting financing on an empty park. I suppose I could ask the folks at my bank for their opinion, and if it is positive include it in the marketing.
I have had good fortune buying empty mobile home parks and converting into long term RV parks. Everything depends on the park's location. What is the rental housing market like? Are there affordable homes in the area? Are there other RV parks in the area and is everyone crammed in like sardines? Our success has been in keeping the lot spaces large as for double wide mobiles with yards and parking. Long term RV residents appreciate the extra space and parking. You can even have 10x10 sheds put on each lot for additional storage and charge for it. You can also charge more per month for the RV space typically than a mobile home. We even have one park that I am expanding a bit that the county will allow me to use one septic system (tank and drainfield) for two RV spaces. Also have a little laundry building with a washer and dryer that clears a few hundred dollars a month. Something else to consider I suppose.
Brewton, AL · Member since 2013 · 16 posts · 5 votes
2y
Roger, I think the demand is there. But, I don't want to run a mobile home park. I only want to be the developer, and sell it after the infrastructure is completed.
There is a lot of interest in these older (filled) MH Parks. However, some are a nightmare when you take a closer look. A while back I had a client that was interested in a jalopy of a mobile home park. One of the worst in town. They wanted a land survey of the park, along with the location of the underground utilities. The place was a disaster. It was such a mess that they found a way to back out of the contract.
Brewton, AL · Member since 2013 · 16 posts · 5 votes
2y
Samuel, I reread your post and now see the point you were making. Totally agree, RV parks are doing very well. However, the long term parks can sometimes bring in an element that might not be good for the neighborhood. I would imagine RV parks are a lot more work than a MH Park, but the difference in $$ might be worth it.
Brewton, AL · Member since 2013 · 16 posts · 5 votes
2y
(Last post was to Roger, not Samuel. Sorry about that.)
Samuel, the site is 14 acres, high and dry, with thinned pines. Public water, septic systems. Nice spot. Not sure how many lots it will yield once it is designed. I prefer it not be super high density since I know some of the neighbors and want to keep them happy if possible. I can draw up a preliminary site plan and send it to you if you are interested.
(Last post was to Roger, not Samuel. Sorry about that.)
Samuel, the site is 14 acres, high and dry, with thinned pines. Public water, septic systems. Nice spot. Not sure how many lots it will yield once it is designed. I prefer it not be super high density since I know some of the neighbors and want to keep them happy if possible. I can draw up a preliminary site plan and send it to you if you are interested.
It all comes down to the numbers. I am building a small 4 or 5 pad one a couple of acres I have in Athens soon. I figure 14 acres would get anywhere between 14-28 lots if you don't want to go super dense and depending on the exact landscape. (The one I am building in Athens has an aggressive hill in the back right now, which is where we will make some septic boxes.)
Let's take it to the DMs so I can run some numbers on it a little better.
Mark and Samuel, Just saw a brand newly developed MHP for sale in LaGrande Oregon. Probably some big differences from Oregon to Alabama but you might find it interesting. Its in Mobilehomeparkstore.com if you are interested. Saw it last night.
Specialist · Scottsdale, AZ · Member since 2014 · 626 posts · 700 votes
2y
@Mack Fleming your case is quite a bit different than most people seeking to develop, since you own the land and have an experienced background. The item not mentioned on this thread that will be crucial to making a decision is what will the park be worth when you are done? I recommend you network with the most experienced RV park brokers in that region to gain a clear understand of what they could sell it for, then work backwards from there to determine if the cost and energy will be worth it. You can google RV park brokers, or search for them on listing platforms like Crexi. Feel free to DM me and I can recommend a few good ones.