Mobile Home Parks

[Ana Carini]

Hello there,

What would you recommend to anyone interested in investing in mobile home parks? Is there any specific training or education that would be valuable to increase my chances of a positive investment in the field? I am based in the SF Bay Area. Would love to hear your suggestions. Thank you!

[Brad Johnson]

@Curt Smith regarding your mobile home park purchase contract question:

A mobile home park purchase contract is very similar to a standard apartment building purchase contract. However, here are a couple important contract clauses for mobile home park purchases:

1. Have the seller warrant that the property is currently permitted to operate as a mobile home park and has all the necessary zoning and regulatory approvals needed to maintain such approval.

2. Have the contract stipulate the exact number of permitted pads. The seller needs to warrant that there are no regulatory or non-regulatory restrictions that would limit your ability to replace a homes if one or more of the sites becomes vacant.

3. If pursuing bank financing, push for lender due diligence contract extensions. Non CMBS loans financed by regional banks take a long time to close. You'll want an automatic extension if you're able to show the seller a lender term sheet. Any seller acting in good faith should accommodate this request, but it's best to put it in the contract so you don't need to sign an amendment.

4. If seller financed - make sure it's non-recourse and that the promissory note has specific "cure rights" should you accidentally miss a payment.

5. Ensure the contract stipulates that you'll be purchasing all of the following:

• The land
• All improvements
• Any park owned homes (hopefully with titles)
• Any seller financed mobile home notes
• Any equipment necessary for park maintenance

Best of luck.