Newish Investor, Looking to start Mobile Home Park
Hi all,
I am new to BP. I would love to get feedback as I am a newish investor. I have a couple of real estate deals with multi-unit affordable housing. However, I am looking to start a mobile home park from the ground up which I have not done before. I am looking to provide rent to own mobile homes. I am in the north texas area and have the land under contract.
I read some of the posts about the challenges and some posts going as far as to say it is a terrible idea. I'm not necessarily convinced i should change plans.
Thanks for additional advice as I engage design engineers, contractors, and mobile home wholesalers.
Thanks
A solid resource to check out is MHPIRL (Mobile Home Parks In Real Life) podcast if you have had 0 exposure to the business. I would also try and a find a few parks in the region to try and network with the owners. Go a few towns over if you're concerned about upsetting local competition. Ask them what it is like for them. Also.. double triple check your zoning/city ordinances. Some places only allow 1-2 MH per acre (I'm not familiar with your market at all though).
At a minimum you're going to need to know what your market can fetch for lot rents, cost to build your spaces, and what utilities are going to be readily available to you. Those can vary widely regionally. That will tell you if it's worth your time pretty quickly.
Thanks Jonathan, I appreciate the information
#2 Mobile Home Park Investing Contributor
- San Antonio, TX
@Gordon Park If you own the land and plan to put mobile homes on them, it's best to confirm what you can and cannot do with your local zoning office. Sometimes there may be restrictions on placing mobile homes on the land regarding the age, size and condition of the homes. Before you buy, it's best to know the zoning restrictions if any. Good luck!
Hello Gordon we are in the same situation now that you were in back then. We would really like to hear how it has been going for you. Any updates would be greatly appreciated. Thanks
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Real Estate Agent Pennsylvania (#RS352677)
- Robin Hood Properties LLC
- 215-999-3005
- http://www.robinhoodpropertiesllc.com
- [email protected]
@Gordon Park I am interested in starting or buying an existing mobile home park.
I would consider a partnership.
@Joel Lazar I started a mobile home park from scratch in Silsbee, Texas, Kelly Estates. I rent to people with housing vouchers and the government pays most of their rent.
@Joel Lazar I would suggest becoming an active member of the MHP Tribe on Facebook. Huge group of MHP-minded folks that are posting and meeting on that group. Should provide better results than responding to a 2-year old post;)
And please feel free to reach out to me anytime if you have questions or just want to chat MHP!
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Real Estate Agent Georgia (#401878)
- 404.737.0018
- [email protected]
Originally posted by @Marco Padilla:Hello Gordon we are in the same situation now that you were in back then. We would really like to hear how it has been going for you. Any updates would be greatly appreciated. Thanks
Hi Marco, thanks for sharing interest. Me and partners paused for a bit and then we changed direction as the area we are in was too nice for a mobile home park we concluded. And instead we are creating a subdivision doing single family residential 1 acre lots
Originally posted by @Joel Lazar:@Gordon Park I am interested in starting or buying an existing mobile home park.
I would consider a partnership.
Thanks Joel, i'm also always interested in hearing opportunities available
Quote from @Joel Lazar:I'm just a tad bit late here Joel, but I'd be interested in going into a partnership as well, the mobile home space is intriguing to me.
@Gordon Park I am interested in starting or buying an existing mobile home park.
I would consider a partnership.
Been an owner operator for 25+ years. Let me cure you of one of the primary mistakes folks who get into the MHP business make; Renting out the mobile homes (I know you said rent to own, I'll address that later). On it's face, your looking at "double the income" so to speak, and that increases the CAP rate which will increase the value of your park. This is in direct violation of the philosophy of owning and operating MHP's which is "owning the dirt, and you can't hurt the dirt". MHP's have lower operating costs because you do not have to deal with the problems of a rental unit. Your just renting dirt. And when it comes time to sell or refinance your MHP, banks and buyers, including myself will look at any and all park owned homes as a huge negative and will discount the value of your park because of it.
Now, with the above being said, you've got to fill vacant spaces. First stop is your local dealer whom you offer him the opportunity to park one of his models on the property and pay you rent. You'd be surprised at how many of these dealers will do that.
Or, you buy a home, put it on the lot and then SELL, not rent to someone. But what if most folks don't have the $10 to $20k to pay cash for a home? Then you sell it to them on a note, and the note is in the name of another LLC you start. You buy a cheap mobile home for let's say $6K, put $1500 into fixing it up and sell it to someone on an owner carry note for $18,000 with $1500 down and 10% interest over 8-10 years. You then sell that note to a note buyer at a discount and collect maybe $12,000 at closing and now the note is no longer yours to manage, and you put $6k profit in your pocket and if the buyer quits paying not your problem as the note buyer is now on the hook for your space rent.
Never have any park owned homes. Ever.
Hope this helps!
Quote from @Bridget Gilder:
@Joel Lazar I started a mobile home park from scratch in Silsbee, Texas, Kelly Estates. I rent to people with housing vouchers and the government pays most of their rent.
HI Bridget,
How hard was it to get housing vouchers? How competitive are mobile homes as oppose to traditional dwellings?
