Best Place to Start Turnaround Park
I recently purchased my first park after reading Deals on Wheels several years ago and looking for smaller parks in my area. The park I purchased is currently empty after years of decline with an older owner that apparently was in poor health. The park has 9 spaces and one stick frame house that need a lot of work. The eight mobile homes that are currently on the property are in really bad shape. I decided to rehab one and demolish or give away the remaining homes. The plan going forward is to move remodeled homes in as I demolish the other homes and owner finance them to the new occupants. I purchased a rehabbed 2 bed 2 bath home from a local dealer for $20k. I have read a lot about others purchasing homes for $5k and rehabbing them themselves. I look at Facebook and Craigslist and have also reached out to other local parks. What other places should I look at? Is $5k purchase price with $5k rehab reasonable?
The other question I had after reading lots of posts regarding expenses in small parks is that 50% of revenue will go toward expenses. My plan is to finance all 9 mobile homes so the residents will be responsible for repair expenses and utilities. When the park is full the revenue will be $725 x 8 single wides $1000 x 1 Double Wide and $1000 for the house or $8300 mo gross. The expenses that I will pay for are general liability coverage for the park $1025 yr, coverage for the mobile home $55 mo x 9, $900 yr coverage for the house, and property tax of $2435. This comes out to $826 per month or roughly 10%. I understand there will be repairs/ vacancies, but an additional 40% seems extreme if we do a good job of fixing the homes on the front end. Thank you for any input
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I have had luck obtaining homes from a higher-end mobile home community in my area. They even gave me one for “free”! Budget at least $2000-3000 for moving and set up of the home and at least $4000-5000 for rehab depending on the condition of the home. Add on another $2000+ for HVAC. And hook ups to electrical, water, sewer, that will be at least $1000, probably more if you have to repair water leaks or update wiring. Also, costs for steps and skirting and permits So, maybe a budget of $10-15k for a rehab? You can also buy new homes from Legacy and they will finance them for you. Their 3/2’s run around $28-30k and come with all appliances, including HVAC, it could be worth looking at their program.
Good Luck!