Buy or build a mobile home park?

8 Replies

Running some numbers recently and was hoping someone else could shed some advice for the mobile home park style of investing.

Although, i understand the numbers and what not, I was hoping to find someone with actual experience in it. What do you find best, build a park or attempting to find a existing one that could use a little TLC?

I can say that lots of places are not allowing development of new MHPs. Lots of cities are working to remove existing ones even- so I'd start by ensuring it's possible where you live. 

Look up your state, city, county laws with regard to development and or look up those divisions and call and talk with someone

@Natalie Kolodij   Just FYI  you simply start at the planning department and then work your way down

now in reality building new parks is almost none existent absorption rates make it so tough that only those with the deepest pockets and no debt can make that work.. 

 

Originally posted by @Jay Hinrichs :

@Natalie Kolodij  Just FYI  you simply start at the planning department and then work your way down

now in reality building new parks is almost none existent absorption rates make it so tough that only those with the deepest pockets and no debt can make that work.. 

Thank you! I couldn't remember the exact wording for it. 

I knew someone smarter than me would come along and clarify. 

 

@Chase Romine

Call the respective City or County Planning Dept. In my years of experience being a public and private sector City Planner, cities usually do not look to rid themselves of a MHP. Typically they are purchased by a large developer, rezoned, and then built into single or multi family housing. Just ask the Planner what the current zoning is and General Plan Land Use designation.

@Chase Romine buying is your best option of entry from a time and money standpointe.

Development of land, cost of bringing in homes and finding a community that will allow for new development would be costly. Time alone would be costly and to @Jay Hinrichs point, debt would be a tough way to go.

We own two parks and are under-contract on another now. Communities are tough on parks as it is due to many being mis-managed.

@Chase Romine buying a park is a considerably better option than building one. Go search BiggerPockets for threads regarding building a park and you’ll find comments by experienced park operators who would never do it.

When you buy an existing park, even though the park may not be running like it should, there will still be cash flow the day you close on it, and if you buy the right park, there is potential to increase their cash flow year-over-year as you own it. Conversely, if you develop a park, you could be going backwards for the first 5 years with no positive cash flow.