Good Investment for first time MHP?

Question

I currently own SFH's and a 4-plex.  Looking to expand into MHP.

Considering a MHP built in 1969 with 22 sites, all owner owned homes.  NOI: $101,866 (Revenue: $110,000 - $8,134 expenses) Asking Price: $1.1M

Total size of park is 4.25 Acres with 1 Acre undeveloped.

City water/sewer, tenant pays electricity, gas, water, sewer.

Would love to hear feedback on if you think this would be a strong candidate for a first investment in MHP.

Geoff Livingstone · Answer

Thanks @Jim Tassoni

@Dan Gomez appreciate the input, very helpful.  I will send you a DM.

Jordan Moorhead · Answer

That's a high asking price. I'm currently working on one that's 49 sites for $700,000.

Dan Gomez · Answer

@Geoff Livingstone, WOW, for a second i thought i was reading my own story.  I started w SFRs then moved to a 4 plex and bought a MHP w 23 spots last month.  I agree the expenses are very low on those numbers.  Factor in trash, electricity, water for the common spaces, insurance and your debt service alone will surpass that amount.  Maintenance, although much easier on the mobile homes, always comes up.  I only have 3 TOH, the rest POH which i will move to rent to own but for now i have to deal w the maintenance.  I got my place for 710k.  I think your price is way more but there are a lot of variables with these.  Mine is in Lousiana.  Looking to start w rent manager to save me time which is a $400 initiaion fee and $150 per month.  PM me we can discuss further.

Paul Sofia · Answer

......I would add, get educated in this space prior to wading in the waters....different animal.

Paul Sofia · Answer

Agreed...I'd really dig into that one.  Something is not right here.

Geoff Livingstone · Answer

Great points Jim, thanks for the feedback.

What typically goes into that operating expense?

Jim Tassoni · Answer

@Geoff Livingstone I would really dig into those numbers.  They are claiming to run the park at a 9% expense ratio.  Best operators in the business are usually around 30%.  Possible they are doing a lot of the work themselves and/or cutting corners somewhere.  Not sure how you are planning to run/operate the park but numbers seem suspect.  Best of luck with your MHP journey!