Rental Property Investor · Cedar Rapids, IA · Member since 2020 · 8 posts · 5 votes
Hello, everyone! I am working with an investor who has recently purchased a Mobile Home Park. There are a couple of vacant lots on the property and I am looking for strategies to occupy those lots. I have been doing some research into: rent to own, advertising, convincing renters from other locations to move, and a few others. The investor I am working with would prefer not to buy and operate multiple homes as it creates added headaches. Recruiting other owners to move would prove to be very difficult because of the cost and stress of moving an entire home to a new location. The one option that I have seen that shows the most promise would be contacting manufacturers and seeing if they would want to put some of their inventory on our vacant lots to sell. Does anyone have any suggestions on the topic?
Rental Property Investor · Sioux Falls, SD · Member since 2015 · 9k+ posts · 18k+ votes
6y
My friend just had a mobile home replaced at his lake cabin. The old mobile home was brought to the dump for disposal. It seems an alternative to disposal would be relocating to a mobile home park and selling it. The challenge could be that moving and setting up mobile homes is very expensive, so you don't want it to exceed the cost of the mobile home. You also don't want it to add so much to the cost that nobody will buy it.
Investor · Charleston, SC · Member since 2015 · 113 posts · 50 votes
6y
People buying MHs are looking for lots. We have parks where owners have placed their homes. We also buy homes to place on vacant lots. If your park is at a 9 Cap and a pad rent is $350 and you fill it with a home and convert to tenant owned $350 x 12 x .65 = $2,730 NOI you increase the value of the park by $30,333. If the park is at a 7 Cap you increase the value of the park by $39,000.
Without calculating any equity in the home, as long as you have capital, your costs are significantly under $30,000 and you can recoup those funds, buying a home makes sense. On a 3/2 16 x 80 transportation if short distance and tie down around $3000 and set up $8500. If you pay $9000 for the home and $2000 on additional work you're at $22,500. The limiting factor here is available capital.
Rental Property Investor · Chattanooga, TN · Member since 2016 · 52 posts · 39 votes
6y
Hi @Grant Gibney - you may find some retailers who are willing to push some business your way. I don't know many who will pre-set a home in a park anymore to sell it on-site, but you might get lucky. You'll probably have to incentivize the dealership with a few months of free lot rent for the buyer and not charge them lot rent while they're selling the home if pre-set.
Just keep in mind that this is a really passive strategy and will likely result in very slow infill if any at all. I understand not wanting the headache because it's a huge pain sometimes, but your investor needs to decide if he wants to buy a business or pay a little more for a passive, already optimized asset. Buying a value add park is a business and if he's going to be successful, he'll need to treat it like one. Eventually, though, no matter which way they go, they will be in the home business at some point.
As @David Benton pointed out - it's absolutely worth the learning curve to push the value of the property to do this infill work though. That's where most park owners are making their money right now. Any why manufacturers are on a 3 - 4 month lead time on home deliveries. Getting a dealer's license and set up with 21st Mortgage or a manufacturer's program can make this a little bit easier to handle as well - far easier than trying to infill used homes!
San Antonio, TX · Member since 2009 · 3k+ posts · 1k+ votes
6y
@Grant Gibney It's best to start with the surrounding area. Check with some mobile home dealerships to see what they've got going on with customers who have used mobile homes to sell, if you plan on buying used. If not, then you can talk to the mobile home dealerships to see what the costs are for new homes to place on the lots.
Another option would be to talk to other park owners and mobile home sellers to see if they have any mobile homes they're selling which you can buy. Though, these homes will need to be able to fit in the lots. So, make sure they can fit the size requirements as well as for the hook ups (i.e. electrical amperage, plumbing, gas, etc).