I bought a ZOO today.. well not quite but a MHP

Mobile Home Park Investing
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I bought a ZOO today.. well not quite but a MHP

Jay HinrichsBusiness Member
Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes

Bought a park today here in Oregon... I have owned a few before but never one like this.

all 15 MH's are owned by the park plus a sfr and a studio apartment.

Rents are 475 average on the HM's house is 650 studio 350 ...

Gross rents are 6225 a month.. because 3 of the lovely trailers are condemned and have to be dismantled in place.. ( hoping to trade a metal recycling type person for free dismantle and haul off.

Its on City water and sewer I would not have bough it if it had not been.

Purchase price 80k cash close in 3 days ( they are 3 days away from the water being shut off) So cash talks and you know what walks.. 30k in back water bills and a few other code violations and such...

Not sure if I will keep it   its not exactly a trophy property.. but its on the west coast and you cannot live anywhere else for any less money Period monthly rental crap hotels here are 700 to 800 a month... apartments pretty much start at 600..

I think about 8 of the 11 tenants were pretty nice really been there long time had little gardens in front of their units.. but you had some tweaker trash as well. and of course the MH are well just suffice it to say not the best..

Any advice on how to run one of these never really had this kind of asset I was going to pass but I thought what the heck its only 100k I can't go wrong  ( I hope) I would not have bought it if it was not on sewer and water though..

And I do believe I could flip it pretty easy and quickly for a close to double my money type of deal.. which are the kinds I like to do.

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Joel OwensBusiness Member
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Real Estate Broker · Canton, GA · Member since 2010 · 15k+ posts · 11k+ votes
11y

For investors that have been in this business awhile most of us learn IT'S NOT about the total return but how hard do you have to work for that yield and how long will it take to get there?? 

If it was me I would just resale it and move on. If you already have a lot of money no sense having a headache type asset to drag you down.

For someone that asset may look great to start them off but if you already have millions then you do not want intensive type assets with tons of problems for just a little extra yield.

My mom's friend has been in the trailer business over 40 years. At one point I think she had about 100 but has scaled down over the years to 30 something. She is in her late 70's now. I keep telling her to sell out and just do something triple net and forget about it to relax in her golden years.

She gets mad in court because the judge always gives the deadbeat tenants another 3 to 4 weeks to get out. The trailers are paid by the week as the tenants will blow the money if you do not collect each week.  

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  • Jay HinrichsBusiness Member
    OP
    Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
    11y

    @Bruce May 

      MH's cannot be moved... the only way they can be replaced is to dismantle on site.

    Not worried about tenants they cannot live any where else in the state of Oregon for less money unless they co habitate with others. Lot split would not be profitable the home would have no real value to a home owner its small and old.

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  • Lisa Thoele
    Investor · Newberg, OR · Member since 2012 · 161 posts · 82 votes
    11y

    @Jay Hinrichs Hey Jay!  I think the Rarebird guys are great - I just have another commitment on Monday nights and that is the only day that they have meetings...bummer!  Maybe this summer I'll be able to go to some.  Sorry I will miss you - wish I could make it.  Great to follow your posts.  

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  • Jim JohnsonPro Member
    Rental Property Investor · Denver, CO · Member since 2008 · 355 posts · 324 votes
    11y

    Rent to Own is considered a disguised mortgage. The two most popular directions park owners have gone are 'rent credits' and 'lease options'. There are some IRS challenges with a rent to won program, because they will see the contract as one that should charge interest. So in your books you will have to account for that. 

    In a rent to own, you make payments through he home 'asset' (TV, Washer / Dryer etc) being paid off. 

    In a lease / option (like a car lease) you make a payment to enter the lease, you then lease the asset, and make a significant payment at the end to purchase the asset. That payment must be close towhat the asset is worth at the end of the lease term. 

    Another option to fill parks with new homes is by using Clayton homes. They have a program where homes move into your park and Clayton provides financing for the buyer. 

    I have also heard through a source that Legacy Homes is working on a program that will work like that of Clayton.  

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  • Jay HinrichsBusiness Member
    OP
    Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
    11y

    @Jim Johnson 

      MH manufacture's floor inventory for their dealers in parks.. Is that what your saying.

    This park is just one of those D class deals.. I think the two options are keep it like it is. Or give the homes to the long time renters.. right now they are paying 450 to 475 a month but park maintains their homes like any other rental.. So I would just give them the home and charge say 350 for space rent and they are on their own to keep the homes up...

    I would have to check on the evictions rules again.. I know in Oregon its not as cut and dry as in other areas... and since these homes can't be moved it could cause a problem in that regard.. So as I think it through probably better to keep complete control and not change anything. 

    Park is not big enough for modern homes its all little single wides... I guess you can buy a small single wide these days.. have not looked lately.

    End of the day given this is west coast the play I believe is stabilization and resell to a local that wants to work the park as a nice little cottage type investment.

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  • Account Closed
    Specialist · Northern CA · Member since 2014 · 154 posts · 57 votes
    11y

    @Jay Hinrichs Wow great deal either way you look at it. I have been looking into selling my SFR portfolio and purchasing a MHP. I don't mean to step on any toes to where or how you came across this deal but can you point me int the right direction to begin my search on where to find MHP? Im having trouble finding listings. The only site I seem to find anything would be on loopnet. I know there are many other avenues just not sure where

    Thanks for your help

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