I have been presented with an opportunity to purchase mobile home park off market with 450 pads that are 85% occupied. My contact tells me that the owner is wanting to move away and retire and their family wants nothing to do with it. All pads are rental and not owned by the occupant. All mobile homes are owner occupied none of them are owned by the park.
Any advise on best process and procedures to evaluate the opportunity?
Thanks in advance
@Ray C. Property of this size is highly desirable so you really may have something great on your hands if it checks out. Good occupancy and even better that the tenants don't own the homes.
Value will primarily be based on current income and expenses. May have to adjust for upside / deferred maintenance.
You will want to get financials on it if possible. Does it have debt currently in place that has prepayments?
Do you know what they are asking ?
What are the utilities?
If you are not interested, id be interested to get some more info as this kind of stuff does not come by every day.
Congratulations, this could lead to a great investment. Make sure you put the park under contract with due diligence contingencies. Then get into the financials, tax returns, P&L, current rent roll and talk to management. Sounds exciting. Good luck.
Like stated in the other two comments. Lock it up in a contract. Then you can worry about the profit and loss statements and previous tax returns on the Park. Septic or sewer, city water or well. Average lot rents for the area. If you need any help analyzing the deal or a partner to bring the cash and help lock it up, let me know . You can always tell the seller you are very interested but with a deal of this size you will have to bring in a partner.
@Ray C. Seems like the motivation is there. If you have more numbers, it would help to assess the deal. Good luck!
Small bit of info I received so far. Pads rent for $375-$425
My contact says the owner is looking for somewhere around $4MM for the park
If there aren't environmental issues, flood plain issues, etc you've found a unicorn!
Deals this good only exist in the institutional league. If you don't have it under contract by now it may already be too late.
I'd be happy to share with you my approach to evaluating MHP's. It sounds like it has a lot if potential!