Should I buy a Mobile Home Park???
I am a rehabber (was a remodeler for 30 years, and have now begun doing them for myself), and I was offered an opportunity to purchase a 14 unit Mobile home park in my local area.
It is not a high class park, has 10 older units set up and owned by seller, and 4 vacant spots ready to have units brought in. These are alll single-wide units. The seller picks these old MHs up for $1000-$3000 and rents for $250.00 each making a total income of $2500.00. I am not sure yet what the gas and sewer costs are, so I am not sure what he nets, though I would have to guess around $2200.00. per month.
The Seller is getting along in years and is tired of the landlord thing and so he offered to let me have it for $90,000. He wants $10,000 down (no problem, I have it) and will finance the balance himself at 8% for 10 years, with payments about $972.00 per month. This leaves a pos. cash flow of approx $1200.00 per month.
This would be a no-brainer, were it not for the fact that it is not my niche, and I do not know what hidden problems may or may not lurk beneath the MH and MH park business.
The park is situated alongside some railroad tracks, but he says he has no problem keeping the units rented. Other than the railroad tracks, and a few dumpy houses on either side of the park itself, the setting is nice, green, big trees and has a pleasant feel - not a lot of trash and junk.
What do you think?
Check his records for past rental history. Maybe his taxes to see if he is stringing you along.
Hi!
I'm posting on this old thread because hubby and I are also interested in purchasing a mobile home park. I'm a little nervous about how tight the numbers are and would like some critique if anyone cares to jump in and give advice.
The park is small with 8 pads, an old run down, but sound 5 room motel building and a similar good sized restaurant building. There are only 4 occupied mobile homes in the park, two of which are owned by the landlord. There are 4 unoccupied mobiles, two of which is not in terrible shape, one of which we are puchasing for $750.00 and will rehab and rent. The overall income with the motel rooms renting as they are apartments is $2100.
Therefore, the owner is asking $210,000. We are offering $150,000. with $20,000. down and owner carrying $130,000 @8% for 15 years with a balloon in 3 years.
The improvements sit on 5 acres 2 blocks off a major state hwy and the town is the next stop in booming growth. The city has been preparing for that growth by expanding the water/sewer system (which by the way all the improvements are on the city system). And, I have heard from 2 realtors that the town is hurting for rentals, which after scanning the place and knowing some of the industry seems to be true.
Any comments or formulas would be greatly appreciated.
Vicky
Jim,
I'm in the park business and based on the info you provided, you deal sounds solid. I would personally sell the mobile homes via owner financing and just collect the park rent, which keeps you out of the maintenance business and makes the park attractive to future buyers.