Best Place to Start Turnaround Park

7 Replies

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

Assuming you are not responsible for the home maintenance the majority of communities expenses will run in the range of 30%. This is somewhat higher for smaller communities as many expenses are consistent regardless of size. You will have tree trimming/removal, water and road systems maintenance, common areas and the usual evictions. You may also get some homes back and will have to reno to resell.

@Miles Wicker

as far as getting homes into the park for cheap, try contacting some of the other parks in your area and see if the owners have any vacant homes they are willing to part ways with. You mentioned MH dealers, craigslist maybe a mh wholesaler like a car dealer that may have a few of them laying around. 

How many spaces is the park zoned for? Can you add more pads down the road once you get the first set stabilized?

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!

@Mike G. The park is capped on new spaces, but there is another park a tenth of a mile away with 10 more spots. My goal is to stabilize and fill this park then think about adding the next park. I appreciate your suggestions on finding other homes. Thank you
@Miles Wicker Miles your most welcome. If you have any other questions or concerns feel free to reach out anytime. You mentioned the park down the street is 10 pads.. are they all POH ? What’s the asking price on that park?

@Miles Wicker , if your plan is to make parks whole again, I would highly recommend looking into the CASH program through 21st mortgage. We had to fill 15 lots and opted for new homes fast, vs old renovated slower option. The price was good after jumping through all the hoops! After we did one park, it makes us want to do others. Now we know the drill and can plan ahead better. The park we recently filled was purchased full, so it was a bad situation that needed a fast solution.

@Miles Wicker the reason why the expense ratio seems way off is because you are including the finances payments for the homes. Separate the lot rent and the home payment and keep those in separate buckets. Use the lot rent to calculate gross income and you will find the expense ratio makes more sense.

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