First mobile home park Purchase

23 Replies

I've had a dozen or so mobile homes for about 6 years now, but in July I purchased my first park. 10 lots and a stick built house. 

Crazy thing about this park is that a church had owned it since the 1960's and hadn't collected ANY rent since the 90's! You talk about long time residents!! 

All city utilities billed directly to the tenants. 

The park only has 1 vacant lot. 9 lots have tenant owned homes and 6 of those are occupied. 3 of which have been abandoned and I'm in the process of taking possession. 

On July 15th, I sent all residents an introduction letter with new park rules/regs and a lot lease. I wasn't sure what would happen next. My MHP mentor said they would all walk. To our surprise, no one walked! 1 tenant cussed me up and down, 2 said that the $225 lot rent wasn't bad and the other 3 haven't said a word to me but the ALL PAID ON TIME!

The park cost me $40,000 and is producing $1,350 the first month!

Its a small deal, but you can't hardly beat those numbers. Really looking forward to getting the other 3 mobile homes and stick built renovated and rented!

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GOOD JOB ON HAVING THE GUTS TO BUY A MOBILE HOME PARK! I'M SURE EVERYONE TOLD YOU THAT YOU WERE AN IDIOT JUST LIKE THEY DID WHEN I BOUGHT MY FIRST PARK.

Now here's your next assignment -- go find another one that is 5 to 10 times larger (50 to 100 lots) and with the same financial performance. The park you bought is a 50% cap rate. See if you can hit or beat that on an even bigger deal.

Congrats! This sounds like quite a find. I am intrigued by mobile home parks and very interested in making them part of my portfolio as well. Great job!

@Danielle Wolter

Thanks! MHP's are great! Like everything else, detailed DD is key because there are typically some unseen moving parts that the average SFR investor wouldn't think to look for.

I highly recommend spending some time on the MHU forums and investing in a bootcamp with Frank Rolfe before getting in there.

@Mark D. Hey Mark I didn't worry much about what the exact property value was at purchase. I knew that it was worth more than $40k and I knew that if I enforced lot rent among the 6 current residents that it would be worth approximately $135,000. And that didn't cost a dime to achieve.

@Troy Bailey big things are utilities. What kind, What are they make of and who pays them. Can homes be moved in and out of the park is very important, and what restrictions go along with bringing in homes.

Lol, you keep buying parks with 50% cap rates and you will be overtaking both Frank Rolfe and Warren Buffett!
I'm so jealous...

Originally posted by @Patrick Sears:

Lol, you keep buying parks with 50% cap rates and you will be overtaking both Frank Rolfe and Warren Buffett!
I'm so jealous...

lol that's funny! But seriously it might be in their best interest to just buy me out!