Your MHP buying criteria?

10 Replies

Hey all,

My partners and I have been bird dogging parks for a little while now. So far nothing to hit Brandon's specifics although we've been close. Curious to know what other buyers criteria looks like for buying MHPs. We have a few parks that the owners would sell but need the right fit for a buyer. Will you buy with sewer treatment? Well water? How many pads are you looking for? Vacancy, how much infill etc. LMK!  

Hey @Andy Brohard

Brandon, like most larger investor groups in the space, have some tough criteria to meet. Most of those parks have already been institutionalized.

This is why I am mostly focusing on parks under that 100 space mark. The most important thing to me is the market. A strong market is key: Within a major MSA with solid job growth & diversity. Package plants and well water don't scare me. Lagoons are a no-go unless there is city sewer nearby to tie into when it fails. 

Second most important factor is having some value-add potential. Below market rents would be the main one, but also utility bill-back, poor management, vacancies, etc. are ideal. I am not looking for anything with all tenant-owned homes or a ton of vacancies.

Right now I am focused on the Atlanta market but could be convinced to look elsewhere if the numbers were solid. 

Feel free to reach out anytime if you ever want to chat about MHP!

@Andy Brohard

I’m looking for parks with 75-150 pads.

We have several criteria that we are looking for:

* B and C grade parks that have upside in lot rent, deferred maintenance, infills ok.

* Turn key parks don't often give us much to work with and it's hard to get the math to work to pay investors back

* If we can't create value by the 3 above, is there another obvious growth area (mini storage?)?

* In towns within 20 miles of pop 20k and higher

* Smaller towns need to have strong population growth rates the past 10-20 years

* Median home values in the town/area absolute minimum of $100k, ideally north of $125k

* If median is below $100k, the clientele we want buying our new $50k mobile home is also a client for a $70k stick built home

* 50-150 pads if at all possible, but will look at others if we can get the math to work

* Purchasing at the highest possible cap rate, but really want to start at 10%. 

We like, but don't have to have:

* Near a major college/university (this drives rent rates in town)

* State Capitol (pretty rare for a state capitol to move or shut down, right?)

Knock out punches:

* Lagoon sewage systems.  We won't even look at a park on a lagoon due to the EPA risk, which could be in the hundreds of thousands

We are wary of, but would consider the following if enough other conditions are right:

* Septic

* Well water

States we are looking hard at:

* Minnesota, South Dakota, North Dakota, Nebraska, Kansas, Missouri, Iowa, Wisconsin

Some of the non-major DMAs that seem to make sense for us to target (and of course anything inside 

Jason’s picks

* San Antonio, TX

* Tucson, AZ

* Rollie NC

* Provo, UT

* Wichita, KS

* Omaha, NE

* Kansas City, MO and KS

* Des Moines, IA

* Cedar Rapids, IA

* Ames, IA

* Sioux Falls, SD

* Rapid City, SD

* Fargo, ND

* Grand Forks, ND

* Green Bay, WI

* Madison, WI

* Duluth, MN

* St Cloud, MN

* Mankato, MN

Jason Graves

Real Estate CashFlow