Lender · Charlotte, NC · Member since 2017 · 7 posts · 1 vote
As you can see my professional background is in banking. However, I have been looking into buying a mobile home park or just mobile homes (and pay the lot rent). I wanted to get some opinions on which people prefer. There are obvious pros and cons to buying the entire lot vs. buying a mobile home (in the $9k-$11k range) and renting it out. I am in North Carolina and have heard bad things about Fayetteville, NC. Born and raised in NC but still know little about the best places for Trailer Parks or Trailer Park lots. What type of geographical locations are ideal? Is it better to go ahead and buy the whole lot to own or be some what of a slum lord and rent out the mobile homes?
Alex, you may already know this but when buying a MHP that is not on a City or County permitted Public Water System and has its own drinking water source such as a groundwater well(s) then EPA law (that most States Env. Agencies enforce) is that if has 15 or more service connections or 25 or more people on it then it must be that the groundwater source well(s) must be permitted as a community Public Drinking Water System. If it is already permitted then this should be disclosed by owner before sell since Permit must be transferred into to new owners name upon the sell. If the MHP drinking water system meets the threshold to become a public water system but is off the radar of the States environmental agency then at some point usually by a customer complaint the environmental specialist would investigate and discover that the water system meets the threshold and it must be permitted as a public water system. In this situation there are some cost if the well(s) must be brought up to public drinking water standards. There will be routine sampling (microbiological and chemical) required and a certified operator must be hired to make daily chlorine checks on the water system. The owner could become a certified operator and do this themselves. If you are interested in MHP in North Carolina that is not on a City or County Public Water System then you can find out at this url https://www.pwss.enr.state.nc.us/NCDWW2/ if it is already permitted and can see if it has any violations and/or contamination in well source. South Carolina Drinking Water Watch is at this url http://dwwwebvm.dhec.sc.gov:8080/DWW/
If you find a MHP that has more than 15 or more service connections or 25 or more people on the well(s) and it is not listed at Drinking Water Watch (web url) for its State then it is only a matter of time before the State Agency finds out about it and requires it to become permitted.
I know this is off topic but thought if you weren't aware of this it may help you if you find a MHP not on a City or County Public Water System.
@Alex Wolfe I can't help you out that much with MH locations, but I do know that it is pretty difficult to get financing for MHPs. Most banks in the Carolinas that I've spoken to only want to value the property for the land value only, not from an income standpoint.
The only exception I've heard to this is if the homes are newer (nothing older than 1994). There's also the title issue/de-titling of the homes. Banks want to know who actually owns the home and that can get pretty messy if they're super old and no one knows where the title actually is.
It's been my experience that finding banks to finance this is a lot harder than I originally thought. Private lending would be a great way to go if you can work something out with an individual rather than an institutional lender.
@Will Gaston thanks for your reply. I am aware of the financing issue as I am in the business of hard money lending now. I guess I'm just curious if it's worth the headache of owning a trailer park (keeping tenants etc) or just stick with regular residential home lending.
@Alex Wolfe I don't think it has to be an either/or option.
You can typically afford property management with most MHPs because of the high cash flow. I wouldn't recommend trying to manage them anyway as it takes a certain skill set and experience to deal with tenants like that.
Find a great deal and a solid PM (who has MHP experience) and you can have both. Like just about everything on BP, it is easier said than done. But it is absolutely doable.
@Alex Wolfe I've been helping a few clients look for parks and it's true that the banks are touchy with them. Some of them love them, but the ones that enjoy them have too many on their books.
It's been my experience that most people try to ultimately get the park to be lot rent only. Some folks lease option their homes away to get them off their hands. The SC MHP market has gotten very competitive. There are still a lot of rural ones that do well, but the ones near metropolitan areas are selling for way too high due to land value and a lot of those municipalities are trying to snuff them out.
Alex, you may already know this but when buying a MHP that is not on a City or County permitted Public Water System and has its own drinking water source such as a groundwater well(s) then EPA law (that most States Env. Agencies enforce) is that if has 15 or more service connections or 25 or more people on it then it must be that the groundwater source well(s) must be permitted as a community Public Drinking Water System. If it is already permitted then this should be disclosed by owner before sell since Permit must be transferred into to new owners name upon the sell. If the MHP drinking water system meets the threshold to become a public water system but is off the radar of the States environmental agency then at some point usually by a customer complaint the environmental specialist would investigate and discover that the water system meets the threshold and it must be permitted as a public water system. In this situation there are some cost if the well(s) must be brought up to public drinking water standards. There will be routine sampling (microbiological and chemical) required and a certified operator must be hired to make daily chlorine checks on the water system. The owner could become a certified operator and do this themselves. If you are interested in MHP in North Carolina that is not on a City or County Public Water System then you can find out at this url https://www.pwss.enr.state.nc.us/NCDWW2/ if it is already permitted and can see if it has any violations and/or contamination in well source. South Carolina Drinking Water Watch is at this url http://dwwwebvm.dhec.sc.gov:8080/DWW/
If you find a MHP that has more than 15 or more service connections or 25 or more people on the well(s) and it is not listed at Drinking Water Watch (web url) for its State then it is only a matter of time before the State Agency finds out about it and requires it to become permitted.
I know this is off topic but thought if you weren't aware of this it may help you if you find a MHP not on a City or County Public Water System.
@Michael Farrugia my "MHP mentor" who owns about 170 mobile homes (not MHPs though) says that Fayetteville is a disaster as far as keeping decent tenants. It's in the middle of no where and a major drug hub which can lead to obvious issues in the MHP. I was thinking it had potential because of the military base there.
@Alex Wolfe I considered the military base being a great benefit, I'm looking into rentals, but from what your saying, tenants for apartments might not be much different them a MH tenant. I was also considering Thomasville, NC.
@Michael Farrugia I own a MHP in Thomasville, NC. As soon as I update my Craigslist ad, the phone starts ringing. Let me know if there is anything you would like to know about the area.
If you have not checked out MobileHomeUniversity, please do. Their bootcamps and books are well worth the time and money. I cant speak for or against Fayetteville, but you want to be in an area with a shortage of affordable housing. It is recommended that you look in MSA's with 100,000+ population and a median home price of at least $100k. I bought a MHP in the Triad and the trailers came with it. I did not want own the homes, but have found it easier to control my tenant base by owning the homes. The extra cash flow is not bad either. I hope that helps!