Mobile home lots
I have two 50 x 100 lots I want to turn into mobile home lots and rent out the lots. Looking for input on the process to setup and rent.
First, need to check zoning. Is this out in the country or in city limits? If in city limits you need to confirm that these lots are allowed to have manufactured homes on them. If they're not then you would have the request a change in zoning from the city.
Second, utilities and infrastructure. Is there city water and sewer available at the road? If not you will need to have septic and well installed. Assuming these lots are adjacent to one another you could have one well and one septic system installed, but many people recommend each home having their own septic system. The cost and maintenance of wells and septic can be quite high, so hopefully city utilities available. Is electric already available? You will need to see how electric will be delivered - this may require the installation of a new pole, meter loops, etc. I assume these lots are facing a public roadway and that you don't need to build a new gravel or asphalt road. You may need to obtain a curb cut though if there is not one already. Work with your city on this. Do you have natural gas available or propane tanks installed? The homes you bring in may or may not need these.
Third, you have to bring in a home. You have to prepare the site for the home with a good base. Will you be buying a new one or used one? If new the process is fairly turnkey. They will deliver the home, block it, level it, tie it down and then you can work to have it hooked up to utilities. If you're getting a used home then you will need to find a mover that can do this, and coordinate with contractors to have utilities connected. Then you will need to find mobile home repairmen to make the home ready for rental.
Last, rent the place out. There are lots of posts on screening tenants already and will not go into that. You can straight rent the homes or look into using something like a rent credit program to sell the dwelling and then charge lot rent only.
Finally, you can expect that it will cost near $10,000 per lot just to get the infrastructure and site preparation done. Then an additional cost for the home to be brought in. There are some great books on this topic that covers each of these topics in greater detail and would strongly recommend you check that out. My favorites are Mobile Home Wealth by Zalman Velvel and also the Mobile Home Park University has a great Home Study course which would be applicable for you:
http://www.mobilehomeuniversity.com/mobile-home-pa...
Good luck.
Thanks Jeffrey,
Thee lots or in city limits. I have already checked with the city and got the requirements for the placement of the home. There is city water and sewer. i am waiting for the 911 addresses so that I can get the electrical quotes. The city has already given my a quote for water and sewer taps and the placement of coverts for the 2 lots. I plan on just renting the lots. i am going to ask $300 per month and the tenant pays all utilities. Should I just wait until trailers are moved in before I run sewer and water piping. from tap to trailer.
I would plan to run the utilities first. This is assuming you know the rental market and demand where these lots are. Before I make any major investment I usually run a test advertisement with the listed rent, and if I get 3 calls per day or more then I know I will fill it quickly at that price.
Do you plan to bring in the homes yourself or are you expecting someone to bring in a home they buy? The latter is very unlikely in today's market and you will likely need to bring in your own, but feel free to try the former if you're determined.
After the home is delivered you will do a final utility connection, which will only be a short period of time which tenants will expect - they won't want to wait several weeks for you to permit water and sewer lines across the property.
Let us know how it goes and any questions along the way.
Thanks, I will let you know how it goes.
@Charles Wilson and Jeffrey H. I am wanting to purchase some land myself for the same purpose as Charles. Do you need any building permits or anything of that sort to place a mobile home on the land? Or may it vary between city/county? As far as the est. of $10k initial investment goes that sounds okay to me. I am just going to need to purchase land zoned for mobile home and expect about $10k per lot.. anything else you recommend to look out for? Thank you for your help!
everything is alot more simple more lenient if your out of the city limits. The biggest hurdle is having the funds to complete the entire project. It's good your using existing lots and not subdividing because then you would have to get a subdivision plat and get city council approval.
If you're trying to do this in the city limits you will probably need to check the local ordinances for mobile homes. This will talk about zoning, site requirements, permitting, home requirements (e.g. age, condition, etc), and more.
It's really much much easier to buy a piece of land with a mobile home already on it and then rehabbing it. Then (in most cases) you don't have to worry about the city getting in the way as the usage is either already okay, or grandfathered.
Outside of town there are fewer restrictions, but different problems. Utilities may not be available in which case you must drill a well and get septic. This will increase your costs exponentially and I would not recommend it unless you are already very familiar installing and operating these types of utilities. Also the demand outside of town is probably less, and need to get comfortable that you can rent it or sell it in an acceptable period of time. Use a test ad to find out.
Can't tell you much more without more specifics. By the way, the 10K per pad is only to prep the site for the home (e.g. gravel, electric, plumbing, etc). This does not include the cost of the land or the cost of the home and moving it. You will probably be closer to 40K all in with an older rehabbed home on cheap land. I pick up land home deals for 20 to 25K in smaller towns within 90 minutes of a large metro. I have fewer headaches and can turn them around much faster. Just sayin'.
Good luck.
@Jeffrey H.thanks for the response. Yes I am planning on doing it in the county. I'm just trying to get an idea of things to watch for when searching for a peace of land. Not sure you will know very much in this department.. but what if I want to place more than one mobile home on my piece of land? Is there specific zoning or anything I should be aware of?
Every state is different and so are many counties. In Texas for example there are restrictions that there can be no more than 7 homes per acre as a means to ensure that septic will not cause pollution (some counties restrict one septic per acre, but you can get around this with a larger commercial system for multiple homes...). And also water wells must be at least 100 or 150 feet from any home or septic lines. If the well services 15 homes or 25 people then it will be considered a public water supply and need to conform to EPA regulations which are terribly restrictive. Your parcel of land will need to account for limitations like this if you develop in the county.
You will still need a permit from the county to install well and septic and these limitations will be your biggest obstacle.
One other item - if you're looking to build a larger mobile home park there are sometimes drainage restrictions after you have a certain number of square feet of impermeable surface. In my county the rule is if you have 15,000+ square feet of rooftop, decks, concrete, etc (gravel is permeable) then you have to have a mitigation plan which includes ditches, drainage plans, and potentially detention.
Your county clerk can typically refer you to the engineering department and other relevant contact to make sure you know all the permitting needed to get this going.
@Jeffrey H.I've been doing a quite a bit of looking around. Do you have any recommendations on how to go about finding land with mobile homes already placed on it? Thanks for your help!
The county appraisal district is a great place to start.
The bigger counties usually have a process to get all of their data and then you can filter and massage it for your needs so that you can identify all mobile homes on land (the same owner for the land and the mobile home) under 1 acre and homes less than 10 years old, for example. Then you can take those results and plot them on a map using Google Drive Fusion Tables, for example, to see how their location fits with your requirements for proximity to towns and city limits - which translates into demand for rental.
If your county isn't easy to get this data then you can usually submit a data request to them like this and get the results from them. The only downside is they won't give this to you in a nice excel spreadsheet, so you might have to play with some software or have a lot of fun doing manual data entry.
The final thing I try if the county won't help is to look at neighborhoods where I know lots of mobiles exist and fit my requirements (just from driving around and looking at them on Zillow or MLS you can find where these exist). Then I can pull up all the homes in that neighborhood using some sort of area or neighborhood code and export the results from there.
Thanks so much Jeff for the help!
@Jeffrey H. Another question for you... I'm coming across quite a bit of people trying to steer me away from developing a small Mobile Home Park. One topic in particular, if I go about developing in the county people are saying the septic and well become a great problem when it is for multi-family purposes. Do you have any knowledge in that area? I'm okay with having to spend some money on getting septic/well but, wondering how much of an endeavor this really is going to be?
@Camronn W.I covered some of that above already, but yes it is quite a bit of an undertaking. Small mobile home parks already have higher expense ratios as they do not scale with vacancies like larger parks. Adding wells and septic to this are large (capital) expenses. Here's why...
WATER
Planning - in many states you cannot put a water well within 150 - 300 feet of a septic system or it's drain field. There are other requirements too such as if there are cattle grazing nearby, etc, but you will need to check this with a driller - they can tell you as they will need to submit this plan to the county for a permit anyway.
An effective water well is completely dependent on the water quality and the water throughput (gallons per minute). Basically a well driller needs to understand your area of the country to see how deep other wells nearby are being drilled to get to appropriate water quality. Appropriate is a bit subjective because a single family home may be okay with crappy water quality and have a basic treatment setup to take care of it. If they get sick because they forgot to change a filter or maintain a chlorinator then that's their issue. But if you do that then you open yourself up to lawsuits, just like you would sue a city if they did that to your family.
As a result, people drilling multifamily wells want exceptional water quality which means they will be drilling them deeper and that costs more money. Even after drilling a 400 foot well you cannot guarantee there will be water (dry hole) or that the water quality will be satisfactory, so there is a small, but unknown risk when drilling a well and you will sign all sorts of paperwork with your driller when you get started as they will be covering themselves of this specifically. The best you can do is look up other wells drilled a long time ago still in operation completed by drillers still in operation - there is a high likelihood they are good and know what they're doing as the bad ones don't last long or have other issues. Even after the well is drilled it has to be cased in concrete and capped. Then you need to have appropriate water treatment and distribution equipment installed (if any).
You will need to know the amount of maximum water demand for all of your tenants combined. Usually there is a calculation based on the number of bathrooms and assumptions like everyone is taking a shower and a dump at the same time. This will dictate how much water your well pump needs to pull out of the well, and the size of your pump. If your well cannot meet this demand then your options are to driller a bigger well which costs more money, or to use an intermediate tank to store a certain amount of water (e.g. like 5000 gallons for example) so that you can meet that demand over an hour or two. Then you have to deal with State requirements on how often you have to clean the tank and it has to meet certain specifications like a 24 inch opening for someone to go in there and clean it quarterly. Look into check valves to help preserve well pump life. You will also have to run power to the well, which means a power pole and meter loop if not close to anything already in place.
Okay so now you have an operational water well that serves under 15 homes, I am not going to talk about EPA requirements here for parks with > 15 homes. Now you have to run the piping from the well to the home and you have to look at your state regulations for passing along water charges to your tenants. There can be restrictions about how you measure their water usage and bill them for it. Will you do this using submeters, or based on the number of tenants per home? Check your preferred method against state requirements before sending a bill. Submetering in most states is acceptable based on actual usage and meter calibrations every few years.
You also must check the water quality of your well water frequently. EPA wells are weekly. This well should be at least monthly or fortnightly. There are basic test kits you can get on Amazon to cover most things, but the EPA is getting more restrictive and there could be some future encroachment onto smaller multifamily developments. Your risk. you can hire this service out to a specializing company or you can take the State training and follow their procedures to do this on your own. I have heard from several park owners it's a lot of work.
Wells can be 5-10K for shallow wells and basic treatment all the way up to 50K+ for a public system with really great water quality and commercial chlorinator.
SEPTIC
Planning - every county has their own requirements for septic. Certain ones still allow gravity fed and others only allow aerobic, and each one has their costs and benefits. You will have to follow their rules to get a permit. You will need to look at the options - do I want to get a single septic system for each home or must I get a commercial one and service multiple homes with it? Will the county let me place this many septic systems per acre? Are you okay that a commercial septic system will need to be pumped more often as tenants dump grease, personal wipes, and other crap that can cause them to go out early in their life? A single septic can costs anywhere between $4,000 and the commercial ones can go up to $25,000 or more.
Your soil is very important to the type of septic system that will be allowed. Septic companies will perform a "perc" or percolation test to see how quickly your soil will absorb water. Depending on the rate of absorption a specific system can be recommended and quotation provided.
Similar to wells, septic systems have to be sized appropriately so that if everyone is taking a shower and a dump at the same time that the tanks are large enough to handle the increased volume and the soil can absorb enough affluent water. A 3/2 may only require a 1,500 gallon tank for good soil, but maybe a 3,000 for hard clay soil with poor perc rates. These things influence price as you can imagine.
Alright so now you have a location, septic type, tank sizes, etc ready to go. Plans and permits must be filed with the county and approved. Installation now begins and completes without a hitch. I did see a post here on BP last month about a septic company that installed a septic system on the neighbors property adjacent to the targeted home, so be sure you provide a copy of your survey to the planners.
Your septic system is now in place and plumbed into your home. You have to make sure the tenants know the appropriate usage of the system. Grease, laundry detergents, personal wipes, etc - these are things that kill bacteria and clogs your leach field. They need to sign something that says they understand that the products they flush down the drains and toilets will be septic friendly. This is why a 1:1 septic setup is ideal - if your system breaks then you know who broke it!
You must also pump your septic system at least every two years or so. Many people will claim "I haven't had to pump my septic system for 25 years!" Well good for them, I don't trust my tenants to follow the rules and I do this to make sure my system stays running well for 75 years. You will have to pump more often for a commercial setup too as there's a bigger chance there's more bad stuff down there affecting system performance. Keep in mind that as times change and environmental restrictions get tougher that certain states and counties begin to disallow septic repair and make you replace with a more efficient system - it's key that you keep your system running in tip top shape so that you don't have to replace the whole system because of a clogged leach field for example.
Speaking of clogged leach fields, let's talk about biomat. Over time bad bacteria builds up in a septic system, especially in gravity fed systems, and this clogs the leach field. This is like a black gunk that smells like doodie because it is! There are aftermarket products like Septic Genie that apparently break this stuff down, but it's another $1,000 to keep your system going without installation. And many people think these devices are snake oil and that the only fix is a new leach field, which costs several thousand dollars. My father in law is buying one this week so I will know for sure soon.
Okay now you're dangerous with wells and septic. Ready to build? :-)
Wow thank you for the detail Jeffrey! That does seem like quite the process.I will keep you posted on what I may choose to do. Thanks a million again!!
Hey @Jeffrey H. I hope I'm not bothering you too much. So I went to my growth department today to get all that is required for me to put a mobile home on a properly zoned piece of land. I found the impact fees required to do so are are very steep about $20k after everything. I am in Collier County, FL which I know may be a reason being. Any suggestions? Do you know if impact fees are that expensive if I go elsewhere? I'm open with doing this somewhere other then Collier County. I look forward to hearing back.
@Camronn W. I guess every state is different. The impact fees for things like this in Texas are pretty minimal, unless you're hooking up an entire Mobile Home Park up to city services from septic and well, in which case I have heard 20-50K for a large master meter. But for a single home to have impact fees of 20K is madness.
Impact fees are going to be different on a county by county basis, so you may need to look at adjacent ones and see if they are any better. It might not be - I just don't know the Florida market well.
This is another reason why finding homes that already exist and connected to public utilities is much more attractive...