Purchasing Land for Mobile Home Park

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Purchasing Land for Mobile Home Park

Cassandra Alessio
Real Estate Agent · NJ · Member since 2018 · 95 posts · 31 votes

Hey!

Has anyone purchased land for the purpose of turning it into a mobile home park? If so, what was your process to start? I already reached out to the zoning department to obtain information. 

Thank you for any help!

Best,

Cassandra Alessio

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Brenden MitchumBusiness Member
Rental Property Investor · Atlanta, GA · Member since 2019 · 1k+ posts · 872 votes
5y

Hey @Cassandra Alessio

@Cody Lewis is absolutely right. Start with the city/county Planning & Zoning Department. Your plans to turn that land into a park will likely die here since few municipalities are interested in adding MHP to their town. If it is not already zoned MHP, you're very unlikely to get it approved for rezoning for this reason. 

Hope this helps a bit! Please, feel free to reach out anytime if you have other questions or just want to chat MHP!

[email protected]404-737-0018
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  • Cody Lewis
    Investor · Charleston, SC · Member since 2021 · 263 posts · 122 votes
    5y

    The zoning board and the city or town council are a good place to start. I haven't gone through the process of changing it over but have heard it depends on who you know on either/both of those.

    2Reply
  • Cassandra Alessio
    OP
    Real Estate Agent · NJ · Member since 2018 · 95 posts · 31 votes
    5y

    @Cody Lewis Good to know, thank you!

    0Reply
  • Ronald Allen Barney
    Real Estate Agent · Tampa, FL · Member since 2020 · 411 posts · 373 votes
    5y

    I'll bet @Brandon Turner knows!  :)

    0Reply
  • Cassandra Alessio
    OP
    Real Estate Agent · NJ · Member since 2018 · 95 posts · 31 votes
    5y

    haha @Ronald Allen Barney I already e-mailed him!

    0Reply
  • Cody Lewis
    Investor · Charleston, SC · Member since 2021 · 263 posts · 122 votes
    5y

    @Paul Moore would likely be someone worth asking as well.

    0Reply
  • Brenden MitchumBusiness Member
    Rental Property Investor · Atlanta, GA · Member since 2019 · 1k+ posts · 872 votes
    5y

    Hey @Cassandra Alessio

    @Cody Lewis is absolutely right. Start with the city/county Planning & Zoning Department. Your plans to turn that land into a park will likely die here since few municipalities are interested in adding MHP to their town. If it is not already zoned MHP, you're very unlikely to get it approved for rezoning for this reason. 

    Hope this helps a bit! Please, feel free to reach out anytime if you have other questions or just want to chat MHP!

    [email protected]404-737-0018
    3Reply
  • Cassandra Alessio
    OP
    Real Estate Agent · NJ · Member since 2018 · 95 posts · 31 votes
    5y

    @Brenden Mitchum thank you! The reason I thought I might be able to get it approved was because the land is in between/next to other mobile home parks. Do you think that could increase my chances of the town allowing it?

    0Reply
  • Brenden MitchumBusiness Member
    Rental Property Investor · Atlanta, GA · Member since 2019 · 1k+ posts · 872 votes
    5y

    @Cassandra Alessio

    Yes, I definitely think that will help. Land located adjacent to MHP is not as desirable. It would still depend on the county though. If they are trying to get rid of MHP in that area, then they won't allow another to be built regardless of what's next to it..

    [email protected]404-737-0018
    0Reply
  • Cassandra Alessio
    OP
    Real Estate Agent · NJ · Member since 2018 · 95 posts · 31 votes
    5y

    Ok, that makes sense. Thank you @Brenden Mitchum The zoning department told me I would need city council approval. Do you think it would be appropriate to speak to the council about it without actually going through the process of submitting an approval first to just get an idea on which side they lean to? 

    0Reply
  • Benjamin O'Connor
    Specialist · Colorado Springs, CO · Member since 2021 · 3 posts · 1 vote
    5y

    Hi Cassandra, I agree with the comments in this thread. I would definitely recommend that you contact your city council. The key term that you need to continually emphasize to them is that "you're looking to create Affordable Housing." Most cities across the country are actively looking for ways to solve the affordable housing crisis. As already stated, Mobile home communities are not the preferred housing solution in most cities but since your potential lot is in a mobile home area, the city council may be more inclined to accept.

    -Hope that helps! 

    1Reply
  • Cassandra Alessio
    OP
    Real Estate Agent · NJ · Member since 2018 · 95 posts · 31 votes
    5y

    Hi @Benjamin O'Connor That does help, thank you! I should clarify that it is an out of state property/land so I will be reaching out to the city council as an outsider but I am hoping by stating the creating affordable housing scenario that they would be more inclined to at least hear me out. Thank you!

    1Reply
  • Brenden MitchumBusiness Member
    Rental Property Investor · Atlanta, GA · Member since 2019 · 1k+ posts · 872 votes
    5y

    @Cassandra Alessio fantastic advice there from @Benjamin O'Connor.

    You want to show them how another park in their town will benefit them because most are just thinking "Another eye-sore and tax burden? Yeah right." 

    No need to share that you're not from the area, although I'm sure they'll pick up on it haha

    [email protected]404-737-0018
    1Reply
  • Cassandra Alessio
    OP
    Real Estate Agent · NJ · Member since 2018 · 95 posts · 31 votes
    5y

    @Brenden Mitchum haha they will definitely know I am not from their state!

    This might sound like a dumb question but how do mobile home parks/manufactured home parks work? Would buyers purchase their home and then I would allow them to install on the land or do I purchase the homes and then sell them out? 

    0Reply
  • Benjamin O'Connor
    Specialist · Colorado Springs, CO · Member since 2021 · 3 posts · 1 vote
    5y
    Originally posted by @Cassandra Alessio:

    @Brenden Mitchum haha they will definitely know I am not from their state!

    This might sound like a dumb question but how do mobile home parks/manufactured home parks work? Would buyers purchase their home and then I would allow them to install on the land or do I purchase the homes and then sell them out? 

    This is actually a great question @Cassandra Alessio!  It's actually the first questions you should ask yourself. The bottom line is this; if you're waiting for other people to bring homes into your community, it will take a lot longer than if you make the investment yourself. The most affordable strategy is to find good deals on used mobile homes located in other parks and then move them into your park (it usually costs half as much as purchasing brand new mobile homes, which is your other alternative). After the home is in your community and you've sold it, you will recoup your investment (probably with a profit) and then go find another home to bring in.

    [Side Note] Some mobile home parks may not be happy with you moving homes out of their park but frankly it's a part of the game and its the mobile homeowners right to sell the mobile home to whomever they want. On the other hand, some parks are completely fine with you moving out the older mobile homes to make space for newer mobile homes. Some park owners might even call you as the older mobile homes come available- if you establish relationships with them.

    Hope that helps! 

    0Reply
  • Cassandra Alessio
    OP
    Real Estate Agent · NJ · Member since 2018 · 95 posts · 31 votes
    5y

    @Benjamin O'Connor This helps so much!! Thank you! I wanted to understand how much it would cost me upfront in costs before possibly putting an offer in on the land. Do you have an idea of how much a used home would cost and the cost to move it and set it up on the land? 

    0Reply
  • Benjamin O'Connor
    Specialist · Colorado Springs, CO · Member since 2021 · 3 posts · 1 vote
    5y

    Awesome, glad to help. The price of mobile homes varies significantly based on the city/state. For example, there are literally mobile homes selling for over $1M in Malibu while that same mobile home might be free if you got it in Detroit! (Location, Location, Location Right?) I'm new to BiggerPockets and I dont if I'm allowed to post links to websites so I'll send you a message with a link to a National Mobile Home website for you to look up what mobile homes are selling for in the area that you're considering purchasing that land. 

    The cost of moving mobile homes also varies by location (based upon the local rules regarding whether or not a licensed electrician/plumber have to be involved). In my area, licensed professionals DO have to be involved and there's only a few companies offering the actual transporting services so that hikes up the price to around $8k to move a single wide and $15k to move a double wide (this includes disconnecting, transporting, setting back up and permits). If your area is more relaxed regarding the transportation of mobile homes, then the costs of moving is much less.

    0Reply
    • Mindy JensenPro Member
      BiggerPockets Money Podcast Host · Longmont, CO · Member since 2014 · 7k+ posts · 10k+ votes
      5y
      Originally posted by @Benjamin O'Connor:

      Awesome, glad to help. The price of mobile homes varies significantly based on the city/state. For example, there are literally mobile homes selling for over $1M in Malibu while that same mobile home might be free if you got it in Detroit! (Location, Location, Location Right?) I'm new to BiggerPockets and I dont if I'm allowed to post links to websites so I'll send you a message with a link to a National Mobile Home website for you to look up what mobile homes are selling for in the area that you're considering purchasing that land. 

      The cost of moving mobile homes also varies by location (based upon the local rules regarding whether or not a licensed electrician/plumber have to be involved). In my area, licensed professionals DO have to be involved and there's only a few companies offering the actual transporting services so that hikes up the price to around $8k to move a single wide and $15k to move a double wide (this includes disconnecting, transporting, setting back up and permits). If your area is more relaxed regarding the transportation of mobile homes, then the costs of moving is much less.

      You're allowed to share links to sites as long as you are not affiliate with that site in any way. Self promotion and advertising is not allowed in the forums. Thanks!

      [email protected]Podcast Guest on Show #261
      BiggerPockets
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  • Mindy JensenPro Member
    BiggerPockets Money Podcast Host · Longmont, CO · Member since 2014 · 7k+ posts · 10k+ votes
    5y

    I owned a park for a while. To move a home into our park cost about $5,000 if I recall correctly. That's the cost of the truck to haul it into place and does not include the cost of the home itself.

    Based on this cost, most tenants do not have the funds to move their homes and your park will be barren for a long time. 

    We had connected with someone near our park who was connected to a lot of other park owners and was able to bring in lower cost, older homes to our park. We had some narrow lots and the older homes were the only ones that would fit on those, with the local setback rules.

    Echoing what others say, most municipalities aren't excited about a MHP in their town because a MHP is not considered "improved" land, and therefore is not taxed at the "improved" rate.

    [email protected]Podcast Guest on Show #261
    BiggerPockets
    1Reply
  • Cassandra Alessio
    OP
    Real Estate Agent · NJ · Member since 2018 · 95 posts · 31 votes
    5y

    @Mindy Jensen Thanks! If you don't mind me asking, why did you decide to sell it? 

    0Reply
  • Cassandra Alessio
    OP
    Real Estate Agent · NJ · Member since 2018 · 95 posts · 31 votes
    5y

    @Benjamin O'Connor Wow, what a price difference! Thank you! I will definitely check out that website.

    0Reply
  • Brenden MitchumBusiness Member
    Rental Property Investor · Atlanta, GA · Member since 2019 · 1k+ posts · 872 votes
    5y

    @Cassandra Alessio don't forget about the cost to develop the land! Since it's raw land now, you'll need to run infrastructure through it. This will really only be economical if there is municipal water/sewer right out front the park that you can connect to. To give you an idea of cost, I've heard anything from $20-30k/lot to develop a new park from raw land. Essentially, it's quite a capital intensive project and finding financing for this will be very difficult. Try local credit unions/banks. Your only option may end up being to raise money. 

    [email protected]404-737-0018
    0Reply
  • Cassandra Alessio
    OP
    Real Estate Agent · NJ · Member since 2018 · 95 posts · 31 votes
    5y

    @Brenden Mitchum Weirdly enough they already have water/sewer available. They have one small concrete building I guess you would call it with a bathroom on the land. You make a good point as financing might be larger than I expected with developing costs. I will have to look more into this. For example, $30k for developing land, $60k for land purchase costs, $10k (to move two MH to start), $120k for 2 used homes or $150k for 2 new ones would equal about $220-250k about. Does this seem to make sense? Thank you!

    0Reply
  • Brenden MitchumBusiness Member
    Rental Property Investor · Atlanta, GA · Member since 2019 · 1k+ posts · 872 votes
    5y

    @Cassandra Alessio That's great news that there is already water/sewer infrastructure in place! I'm assuming this is public, right? 

    Anyways, you'd still need to run infrastructure if you plan on putting in more than one site. You also may have to put in a concrete pad, depending on that state's laws. I definitely recommend reaching out to the mobile home association in that state to learn more about what the requirements are for parks. 

    You'd still want to budget at least $20k/site for development, more if it's heavily wooded. And why are you only running your numbers with two MHs? Best to run the numbers with how many you plan to bring in each year. 

    Also, what kind of homes do you plan on bringing in? $60k/used home seems pretty steep. Where is this number coming from? You also should be able to get new homes in for less than $75k/home. The problem here will be just getting the home as many plants are back ordered 6+ months...

    Any news from the city/county on whether they'd even allow this land to be rezoned MHP?

    [email protected]404-737-0018
    0Reply
  • Cassandra Alessio
    OP
    Real Estate Agent · NJ · Member since 2018 · 95 posts · 31 votes
    5y

    @Brenden Mitchum Yeah it is public which is nice. I did not know about the concrete pad, I will have to look into that! I also did not know about a mobile home association. Are they like lobbyists for their state?

    Oh wow I did not know they are back ordered 6 months!! That is not good. I just looked on the site below for used ones in the area. http://www.mhvillage.com/ 

    The mayor told me I have to go through the steps with the city planner. He knew I already started that process and he gave me another contact name to talk to also. I am thinking he is involved with city planning too. He said it was too early to give his opinion since this was just an informal ask and I do not have all the details. I could not gauge if he was leaning towards yes or no. It does have to go through city council also. I did not receive my ideal answer but I was glad he at least was open to hear me out and gave me some insight on what I should do next. 

    So I guess I just have to weigh the pros and cons and learn some more about the town to try and understand how I would think the mayor/council would vote. 

    0Reply
  • Brenden MitchumBusiness Member
    Rental Property Investor · Atlanta, GA · Member since 2019 · 1k+ posts · 872 votes
    5y

    @Cassandra Alessio Yes, these associations exist to protect affordable housing and educate the state on the subject. As such, they should know all the laws and regulations regarding MH and MHP in that state. 

    There are tons of ways to find used homes and the best option changes for every town. Best in the beginning to take a shotgun approach until you find out what works.

    Well at least they haven't said "NO" yet! I'd say that's a great start. The more you talk to these people the better. And, if you're really serious about this, go out there in person and take them to dinner. You should befriend every single person who is going to have an impact on the decision. 

    [email protected]404-737-0018
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  • Cassandra Alessio
    OP
    Real Estate Agent · NJ · Member since 2018 · 95 posts · 31 votes
    5y

    Great idea @Brenden Mitchum ! I am actually planning a trip out there soon. Thanks for everything!

    1Reply
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