I'm looking at mobile home park in rural Ohio at $338,000 and interested any opinions/comments. What do you guys think?
Asking Price: $338,000
Town Pop: 16,297
Year Built: 1950
# of Lots: 36
Total Occupancy: 32
Avg MH Lot Rent: $150
# of POH: 0
Water Paid by: Tenant
Trash Paid by: Park Provided
Year Built: 1950
Size: 3.0 arces
The mobile home park is in a small town and all of the mobile homes are tenant owned are pretty old (1960's or so). The tenants are all long term residents. The trash comes out to be around $3500 a year. There's no amenities at the park though there is a laundromat next door. There's 3 abandon trailers in the park.
is there upside in raising rents? Can you bring in modern sized mobile homes (16x66 ish)? If the lot size is too small you wont be able to bring in more modern models. I would do test ads to check if there is a demand for affordable housing in that town and for that MHP. If you get 20 hits a week you’re good. You’re basically testing to see if you can bring in new homes and sell or rent them out and you’re also seeing if you had to fill a vacant home what kind of response you’ll get. Hope that helps.
The park has the following lot sizes: 80'x30' - 65'x40' - 73'x40'.
@John Kim Definitely look at the economics of the area. Make sure it's enough to support the local population especially when times are bad. Good luck!
Hi @John Kim ,
My quick numbers show the park is selling around a 10% cap, which is appropriately priced for that area.
My only concern would be what value add opportunities are there? Water is already billed back to the tenant and most lots are full. Is there room to increase rents? Are there any expenses that could be cut? You should be thinking of ways to increase cash flow and therefore the value of the park.
Feel free to PM me if you want to chat more. I live 1 hour away from Ohio, could maybe be your boots on the ground for this if needed.
Best of luck!
It looks like a workable deal. You said it is on city water. Are the tenants separately billed for the water? or is the park paying? If the park is paying expenses would be significantly higher. You will need to confirm this.
I would also go to the City Data web site to see the demographic data. you can see how far it is from a major city and get a better feel for the area. It will also be useful to find out the population of the related MSA.
The rents seem pretty low to me for even rural Ohio. 32 out of 36 lots that are occupied by TOHs leads me to believe that you could raise rents after buying.
oops. I see now that the water is paid by the tenant. That is good. Check the demographics like I stated and put in an offer. Feel free to PM me if you want to discuss next steps.
@Matt Boettinger I tried to message you but it won't let me. Private message me, I would love to discuss more about the property. Thanks.
Looks good to me. I am of the opinion that some rural parks have good potential, despite being in small cities.
I recommend calling other parks, apartment complexes, etc to get a feel for housing demand and rates. I also recommend doing some research on city demographics. I would want to know what the unemployment rate is. Definitely look at CL, Zillow, etc to get a feel for the market. Talk to the park manager.
Keep us posted.
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