Empty Mobile Home park
My business partner and I have an opportunity to get into mobile home park investing with a (possibly) unique option. It is a 7.8 acre property with 41 spaces, paved roads, individual lot sewer, power, and water hookups. The downside is that there are no homes in place yet. It will be split from an additional 30 lots from the same park that the owners have been slowly filling since they do not have the time to commit to the full project (they are older and have very time consuming full time jobs).
This property is less than 2 miles from I-95, a Honda plant, 8 miles from the rest of the major employers in the area, and is on the "poorer" side of town where people (doctors) are buying property for cheap and building their big homes in the country. I feel the area has great upside. There is a grocery store nearby, a Dollar General, and a couple restaurants and fast food places within 1/4 mile.
In the area (the other side of the park) they are getting $750 for a 2/br single wide and it is common to see $200/$250 a month for lot rent. I ran a test ad for $750 2/1 mh on craigslist and had 12 responses in a couple of days interested.
What is the experience in getting mobile homes into parks? We want to do a mix of lot rent, POH, and rent to own. I would really like to get as much input as I can from those that have done this. Thanks!!
@Collin Smith Is there any way for you to purchase an option to buy the park?
The thought being you could pay a small lot rent per home you bring in ($50/month) and in turn work your way through the park filling it up without real
debt. If for some reason you get 3-4 homes in and cannot fill any more vacancies you have a little cash flow coming in without debt.
As you fill it up and prove the concept you could exercise your option to buy.
Just a thought
Thank you for the thought. We are working on a seller finance option to present and this could be an additional option for the seller to choose from. I appreciate it.
@Collin Smith awesome! Best of luck Collin
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#3 Mobile Home Park Investing Contributor
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@Collin Smith This is almost the most difficult park you can take on, and I personally would not advise it. However, if you are stubborn and willing to grind it out, you can still make it work:)
Keep in mind, vacant park will not make any money until you have homes in the park. So, if you decide to take this on, it would be smart to create an agreement with the seller to do a couple "pilot" homes while you have the option to purchase the property, as Logan shared above.
If this is a poorer part of town, you will likely be limited to used homes, or the price point will get too high for the area. You will be required to find used homes, buy them cheap, have them moved, set them up, add skirting and awnings etc, renovate the interiors and make sure all the systems work, and then they will be ready for a tenant. That is a lot of work, so make sure your eyes are wide open as you consider this one.
So what are the best methods of filling spots? Our thought is to put it out there for lot rent for some. Approach other investors to lot rent and then rent out homes. purchase a couple homes to rent out as well as approach home dealers to see if there is a way to incentivize new home purchasers to rent from our park.
@Collin Smith can you subdivide the pads there? How large are the pads? There may be a land home play here.
My concern is that you are tied to the other half of the park , rent wise. This is almost a partnership.
We wondered about that as well. Each lot is 55' wide, I think. It is open to do whatever we want, really. We could build townhomes and sell them if we wanted. I like the idea of different options and methods of filling or developing. Thanks
I have family that buys/ sales mobile home parks makes great money ! I wonder how much he is knocking down,from the size of the house in Denver things look good !
@Kyle Nelson the seller will be breaking the road and planting a row of trees to break them apart. The crazy thing is that our side will have the nicer entrance. Both from how it looks and the quality of the road that it is off of.
@Collin Smith. Hello , I started several mobile home parks and it is hard work , but it is probably the best money maker I have. I have a small park of 13 that I put used mobile homes 16x80 only , completely remodeled them , added a deck on front and concrete driveway. I am debt free and I net nearly $120,000 per year. Our service calls are less that .05% , we have more tenant repairs as we do charge them , as our rules are if you break , you pay (actually extra income per year) . The reason we do the remodeling is that we make is very easy to work on and we fix them like a stick house and put quality products on them . We also add all appliances. I also own houses , but mobile home parks are more profitable even with the extra expense I put in the mobile homes. Good luck
Originally posted by @Collin Smith:We wondered about that as well. Each lot is 55' wide, I think. It is open to do whatever we want, really. We could build townhomes and sell them if we wanted. I like the idea of different options and methods of filling or developing. Thanks
I mean in the sense that it’s going to be hard to fill vacancies if the other park is cheaper. You’re practically running the same business in the same location and if you don’t hold similar views about rent raises you might be hurt in the long run
@Kyle Nelson
That makes sense.
I’m not saying this can’t work, but it’s something I would consider.
@Collin Smith
I would only do rent to own.
I would bring in a few used mobile homes at a time hook them up and sell rent to own and just collect the lot rent.
After my experience with POH I prefer tenant owned homes all the time so the tenant can do the maintenance themselves
So
What are the typical expenses for moving a home in? We are expecting about $6000 for move and set up costs. This is based on discussions with other park owners, is that pretty realistic? Is there anything we can learn to do to reduce set up costs?
@Collin Smith
Your kidding right?
My parks are in suburban Columbus OH..
For $2000 I can get someone to drop off a used mobile home and haul out my old one for scrap.. this doesn't include the cost of home
For $6000 what's included ?
@Collin Smith
Commercial property usually sold for current value. No homes paying rent? Very little value.
Potential - HUGE! Best case scenario!
I’ve helped park owners fill parks with used but easily rehabbed homes. I’ll share the best sources to find them - just let me know:)
@Hai Loc
This was for setting it up, power pole, utility taps, leveling and underpinning.