Leasing an entire MH park?
Hi everyone. I am new to the site here and needed to get some thoughts and opinions on leasing a mobile home park. I have been researching flipping mobile homes, renting them, and also owner financing them. I've read a lot about the Lonnie Deals and thats kind of been the strategy I have planned to execute.
However, I stumbled upon a guy on Craig's List who wants to lease his 6.2 acre mobile home park. It currently has about 60 lots but is completely empty save for one loan tenant( why this person is still there IDK). It use to be about half full, but due to not being properly managed a lot of drug activity began to come in and out of the park. So instead of just picking and choosing who got to stay and go, the owner evicted everyone and removed all the trailers.
That was a few years ago and now the park owner has decided he wants to lease the property. He's not too keen on the idea of making it another park but would if the right person came along. I told him about my park management ideas and seems to be coming around.
I think this could be very lucrative for both the park owner and myself. I would basically run the park(at least till I establish a sort of park manager to live at the park and oversee things in my stead) and bring in qualified tenants. I plan to rent lots, rent mobile homes, and or sale and owner finance the mobile homes. I have limited start up money but I already have 2 mobile homes that I can place in the park to get the ball rolling. I figure I'll mostly concentrate on renting lots just to get some cash flowing in ASAP and then focus on renting and selling mobile homes later on.
I am supposed to meet him this Thursday(8/6/2015) and discuss some numbers. And that's really where I need the HELP! When I first met up with him he said we could make the lease amount a set number or make the lease based off of how many mobile homes are in the park. He mentioned a tier leasing of some sort as well. Basically I would have a set amount of time to get X amount of mobile homes in and the number goes up in 6 month increments. I really don't know what my best option would be here as far as negotiating the lease price. Do I say I'll just pay X amount a month or should I go for the "per MH" route? The average lot rent in that area is $165 I believe. With some changes to the landscape I think I could charge $200 a month. I know those are not high numbers but lots in the state of WV don't rent out for much. The lot rent alone won't make me a bunch of cash(though 60 lots x $200 a month isn't anything to shake a stick at) but once I start renting or selling mobile homes it could bring in some cash.
So what are your thoughts experts? How much should I expect to lease this place for? What sort of questions should I ask him? I'm new to this and have not been able to find anything on the web about leasing an entire mobile home park. Sorry for the book, and I look forward to meeting you all and getting some feedback!!!