Has anyone done a complete clear out and restart of a MHP?

Mobile Home Park Investing
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Has anyone done a complete clear out and restart of a MHP?

Tyler Wagner
Portage, MI · Member since 2017 · 6 posts · 0 votes

I've got a lead on a park in a great location and school district, but the place is an absolute dump and is below 10% occupancy. I did a drive thru yesterday and it needs a complete overhaul. There are 20+ vacant homes that look beyond repair and frankly if they were salvageable, they wouldn't be up to the standard that I would be hoping to create in a fresh new community. 

My question is, has anyone had experience taking on a project like this? If so, I would love to hear how it went for you and any tips for making it successful. 

If I aquire the property, I hope to do a master lease with option and have very friendly terms in the first year or so to allow me to turn the property around without the high financial burden on a property that doesn't make money. All thoughts will be appreciated!

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John Arendsen
Homeowner · VISTA, CA · Member since 2015 · 727 posts · 340 votes
9y

You may want to consider something like this. We do them all the time and it's not as difficult as it looks. Additionally, you may run into some issues with "legal nonconforming" situations whereby whence you remove an existing structure completely and replace it with a new one you will have to comply with any/all setback and permitting requirements that were once grandfathered in. 

It may not be an issue in Michigan but it most definitely is in Cali. Or on an economy of scale basis it may not even be feasible. Good luck. I'll keep you posted on our progress on this particular home if you or any other member/contributors wish.

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  • Marshall M.
    Washington, DC · Member since 2015 · 81 posts · 49 votes
    9y

    Sounds like major upside but don't be deceived. First make sure there's a market for mh. If 10% occupancy, either market very bad or park run into ground, or maybe mix of the two. Hard to do lease up in MH from 0. You may yourself with a lot of rental homes to make it work. Look at 21st cash program. One or two homes at a time. Try to rehab the ones you've got if they are salvageable. Good luck and tell us how it goes!

    0Reply
  • Todd Dexheimer
    Rental Property Investor · St. Paul, MN · Member since 2016 · 3k+ posts · 3k+ votes
    9y

     I purchased a mobile home park and was planning on taking out all the mobile homes and replacing them. However prior to removing the mobile homes I found out that if I removed more than 50% of the homes the city would no longer consider it a mobile home park & could shut it down. I would check with your local government to make sure everything you're doing is able to be done and then find out the cost of doing so.

    2Reply
  • Tyler Wagner
    OP
    Portage, MI · Member since 2017 · 6 posts · 0 votes
    9y

    That's something I didn't even consider. Thanks for sharing. How did you go about getting around that issue? Did you leave all the homes in or did you replace one by one?

    0Reply
  • Tyler Wagner
    OP
    Portage, MI · Member since 2017 · 6 posts · 0 votes
    9y

    Marshall, the property was obviously poorly managed and wasn't marketed well because there is plenty of need for affordable housing in the area. Out of state owner seems to have not cared about the park much at all. 

    I've never heard of the 21st cash program, do you mind explaining what that is? Thanks for the well wishes!

    0Reply
  • Justin Bush
    Contractor · Texas Corners, MI · Member since 2012 · 37 posts · 10 votes
    9y

    hey Tyler! Portage huh? I'm right in Texas Corners! I'm currently looking into another park in area. Good luck with your project! Sounds like a big one...is that the park in Mattawan by any chance?

    0Reply
  • Omar C.
    Chicago, IL · Member since 2014 · 91 posts · 32 votes
    9y

    I did as close to possible and I can tell you it's not easy and it's a long process.  Make sure you have lots of capital and patience.  The more capital you have access to the shorter it will take to turn it around.

    0Reply
  • Tyler Wagner
    OP
    Portage, MI · Member since 2017 · 6 posts · 0 votes
    9y

    Hey Justin, yes it's the mattawan park. I haven't done any dealing with them yet just trying to figure out how I could make it work if I pursue it. Have you had any communication with the owner or the agent of the mattawan park? How's the process going on the park you're interested in?

    0Reply
  • John Arendsen
    Homeowner · VISTA, CA · Member since 2015 · 727 posts · 340 votes
    9y

    You may want to consider something like this. We do them all the time and it's not as difficult as it looks. Additionally, you may run into some issues with "legal nonconforming" situations whereby whence you remove an existing structure completely and replace it with a new one you will have to comply with any/all setback and permitting requirements that were once grandfathered in. 

    It may not be an issue in Michigan but it most definitely is in Cali. Or on an economy of scale basis it may not even be feasible. Good luck. I'll keep you posted on our progress on this particular home if you or any other member/contributors wish.

    Edit
    3Reply
  • Bobby Vaughn
    Hobart, OK · Member since 2015 · 7 posts · 0 votes
    9y

    Whats the final finish look like?

    0Reply
  • Account Closed
    Johnson City, TN · Member since 2014 · 586 posts · 705 votes
    9y

    Where do you plan to acquire the units you will use as replacements and what will be the cost?

    0Reply
  • John Arendsen
    Homeowner · VISTA, CA · Member since 2015 · 727 posts · 340 votes
    9y

    California Beach Casita @Bobby Vaughn. It will have a 12/12 metal roof and a combination design of Hardy Board cemititous exterior paneling. It won't look like a "WOBBLY BOX"

    0Reply
  • John Arendsen
    Homeowner · VISTA, CA · Member since 2015 · 727 posts · 340 votes
    9y

    If I can't rebuild them from the frame up I'll purchase them through various MH purveyors @Account Closed

    1Reply
  • Jay Rissler
    Pleasant Hall, PA · Member since 2013 · 3 posts · 0 votes
    9y
    I am new here and was looking at doing something similar to this, so I am following along learning!!! I wish you the best!!
    0Reply
  • John Arendsen
    Homeowner · VISTA, CA · Member since 2015 · 727 posts · 340 votes
    9y

    Welcome @Jay Rissler! I'll be moving forward with the project as soon as the we've had the HCD foundation/framing/elec/plmb inspection. Can't always guarantee their ETA's. Inconvenient but cost of doing biz.

    0Reply
  • Ken Rishel
    Specialist · Springfield, IL · Member since 2011 · 700 posts · 479 votes
    9y
    Originally posted by @Tyler Wagner:

    I've got a lead on a park in a great location and school district, but the place is an absolute dump and is below 10% occupancy. I did a drive thru yesterday and it needs a complete overhaul. There are 20+ vacant homes that look beyond repair and frankly if they were salvageable, they wouldn't be up to the standard that I would be hoping to create in a fresh new community. 

    My question is, has anyone had experience taking on a project like this? If so, I would love to hear how it went for you and any tips for making it successful. 

    If I aquire the property, I hope to do a master lease with option and have very friendly terms in the first year or so to allow me to turn the property around without the high financial burden on a property that doesn't make money. All thoughts will be appreciated!

     I have done this successfully four different time, most recently a little over a year ago. If you look at older threads, there is some description of how it was done.

    0Reply
  • Ken Rishel
    Specialist · Springfield, IL · Member since 2011 · 700 posts · 479 votes
    9y
    Originally posted by @Account Closed:

    Where do you plan to acquire the units you will use as replacements and what will be the cost?

     I always use brand new homes. The homes come directly from the factory that can meet my size, quality, and price point needs.

    Fifteen years ago it made some sense to use preowned units. Today, in my opinion, it doesn't. The cost of buying a preowned unit, adding in the costs of tearing down, moving, setting up, and repairing and refurbishing is usually higher than just buying new if you really want a great unit to sell. Further, the community will look better and instill a greater pride in residents if the units are new.

    The exception might be in a very low end community where older small metal on metal units are the only thing that make pricing work - basically a slum.

    0Reply
  • Wendy S. Yu
    Woodland, CA · Member since 2017 · 4 posts · 1 vote
    9y

    @John Arendsen, you might wish to correct the typo in your signature - the link to your webpage is misspelled and doesn't direct to your site. 

    Back on topic, I look forward to seeing your completed project pics!

    0Reply
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