Looking for advice - Mobile Home Parks
Hey BP!
I am looking for some advice in regards to purchasing mobile home parks. For a few years I have wanted to purchase a mobile home park (I have a friend that owns one and he makes $$$$$) but have felt I did not know enough. After many hours of research and listening to the latest BP podcast I fell that I am ready for the challenge.
I have found the following parks for sale in my area............
$750,000
59 Lots, 44 Occupied @ $265-315, 15 vacant lots
Monthly income approximately $12,550
Annual income approximately $150,600
$900,00
30 Lot @ $225, 8 Vacant Lots
5 rental homes @ an average of $500
Monthly income approximately $9,250
Annual Water/Sewer Income approximately $30,000
Annual income approximately $141,000
Any advice on these properties? How do the numbers look? What should be a concern? etc.
Thanks in advance!
I would recommend for your first park looking for parks with City water and city sewer because they’re easier to manage and have less risk. Look for parks that have upside in raising rents, upside in filling vacant lots or homes, and upside in billing back the water/sewer. Make sure you buy in a market that supports affordable housing. You can do your research on bestplaces.net for all the data on a market.
That’s enough to get you started :)
Awesome stuff. Thank you!
The 59 lot park looks like it might be a decent price, but you need to find out what the expenses are, and if the water/sewer/trash is billed back to the tenants.
The 30 lot park looks suspicious because you wrote "water/sewer income". You can't expect to make a profit from water and sewer, so I wouldn't use that in the valuation.
You should base your valuation only on occupied lots at current lot rent, then you can add in the value of park owned homes and site built homes.
Mobile homes aren't worth much, so don't over value any park owned homes. Don't put too much weight on being able to fill the vacant lots either. It's possible, but could turn out to be harder than you expected.
As the previous post mentioned, you also should research the area and associated metro to be sure that median home prices are well above mobile home prices, two and three bedroom apartment rents are well above what the park charges, there is a good size population, the housing vacancy rates in the area are no more than the national average, the household income is decent, and the unemployment rate is around the national average or less.
Having a Wal-Mart within 5-10 miles is a good indication the area can support the park.
Just checking to see if you have the 59 unit park under contract @Jamin Olds ?
@Richard Allen
Thanks for the input.... There are a few Walmart close to this location. I will look into the water/sewer and see why they are predicting income. Thanks again!