Have you found a mobile home park that will allow you to buy the home and then rent it out. I tried this before and couldn't find a park that would allow it.
Make sure you run your numbers right including ongoing repairs, insurance etc. That's the major issue with rehabbing old MH's, they were not built to last 40+ years. Yes you can make money doing what your planning, a lot of people do it. but must know your numbers or that $200 month will get ate up with repairs and time. Another strategy a lot of people use is fix them up and seller finance them to the tenant so they're responsible for repairs and eventually own them. But you have to make sure you're Dodd Frank compliant.
When I bought my park it had 6 OLD mobile homes in it. I rehabbed 4 of them, and trashed 2 of them. In hindsight I should have trashed 3 and rehabbed 3. Be careful for the things that are hard to see; under the trailer, above the ceiling, etc. Furnaces and AC units.
Unless the roof is in good shapte, plan on putting a new roof on; that protects everything underneath. That will add to your $5k rehab costs probably but it will last well past your rehab.
I put $6000 each into 3 rehabs. They have been rented for $500/month (including lot rent of $175) since I finished my rehab 2 1/2 years ago. I did a nice rehab and since then I have spent a total of $2100 on other items in the trailers.
So, doing the math $18,000 spent originally, $2100 since = $20,200 total investment. 30 months income at $325(3)/month = 30*975 = $29250. That is roughly @ 20% Annual ROI; I'll take it and look for more just like it. I also have the added bonus of getting lot rent out of it so the return goes through the roof.
If you have taken into account all your recurring costs as well as your "escrow" items such as furnace, roof, flooring replacement, YOUR TIME and effort, and you still net $250/month cash flow, that is a pretty good return. take all of them you can find.
Don't forget: Vacancies, lost collections, LIABILITY INSURANCE, or repair and replacement costs at turnover.
Netting $15k on a $5k investment over 5 years; who wouldn't take that?
For the record: My 4th rehab is the one I learned about the roof on. I should have done it the day I bought it. I did a nice rehab inside and tried to get "a few more years" out of the roof. BAD DECISION - water runs downhill so my seal-coated and still leaking roof is destroying my ceiling and my 2 1/2 year old rehab. A new roof is going on in 2 weeks. AFter the new roof is on, this rehab will have cost me roughly $14k over the last 2 1/2 years. It too has been rented for $500/month but making a little cash does not make up for the lost time or effort, and blemishes my other-wise great tenant relationship. It is never good when your tenants have water dripping from their ceiling. If you roof, or your foundation is bad; RUN!
BTW: You can ALL bring homes to my park in WV. (well, only 2 of you, I only have 2 empty lots). If you win, our tenants win, I win. THAT is a good negotiation.
MOST parks will not even consider letting an investor do rentals there as renters can lower the quality of a mobile home park very quickly. Renting our mobile homes, in a park that is NOT yours, is not something I would recommend to anyone. If you insist, you will want to talk with the park owner before proceeding as they make the rules there and will have the power to approve or deny your prospective tenants.
@Justin Hutchins It depends on the park and the type of clientele it attracts. Before buying in any area, be sure you can work with the type of people the community attracts. You can always change the home but not the neighborhood. If you can work in a park and find the right type of tenants who take care of the home and make payments to you on time, it can work. Good luck!