So I recently found a mobile home park for sale. It has about 18 units, all are not rented. All lots do have homes on them, but not sure if they are part of the property or not. What should I be looking for. Units are older and lot rent brings about 250 (i think). What would you be looking to find out before you buy it? Also would you buy this instead of a couple single family homes? My main exit strategy is to buy and hold for the monthly cash flow. I am hoping that this sells for close to 75k. Numbers are rough and most likely estimates. But would love some advice please.
@Chris Wood Hello Chris, sounds like it might be a deal but there are tons of things to consider. As I am pretty sure you will get some posts from great experienced people here on BP that deal with MHP. So until they chime in, my first thought off the top of my head would be, how is the water and sewer system and pipes. I have read on here if it is not on city utilities then there can be huge costs involved down the road. Do the tenants pay for their own utilities?
I think as with all MHP's you should never figure the cost of the trailers in the cost of purchasing the property. You should look at the property itself only for a price. I may get this wrong but a 18 unit park at $250 a lot equals $54000 gross per year at 100% full. I am not familiar with the expenses of a MHP but lets say it was 40% expenses, take the $54K minus 40% expenses puts you at $32,400 net operating income (NOI), then if the cap rate is 10% then your looking at value for the park of around $324,000.00. You say you hope it is around $75K seems way too low. Just a rough guess. Not sure if that helps you any but there should be some other people to comment with alot more knowledge than me on this topic.
@Chris Wood , Mobile Home University sells a book called 30 Days Of Due Diligence. If you bought that all of your questions would be answered plus you'd have guide on what to do during your escrow period.
Bruce M. Thanks for breaking that down for me. I am pretty sure that the lots take care of their electricity and I think everything else is on the landlord. So I will definitely be looking into all that. Thanks!
I have heard good things about owning one of these and managing them seems to not be a huge deal. Thanks again for the info!
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