Looking to Buy a Mobile Home Park Out of State

[Michael Dallas]

Hey BP! This might be a little bit of a longer post, so sorry in advance. I am 23 years old and just graduated from the University of Memphis this summer. I played baseball throughout college and built so many amazing connections. I recently just moved to Raleigh, NC to do commercial land acquisition. I am extremely passionate about real estate and eventually want to start my own company in a few years. I own a 5-bed/3-bath rental in Alabama, where I house hacked my junior year of college. I really would like to expand my portfolio while I am young and have the time. I have been looking to get into mobile home park investing for a while now. There is currently 2 parks adjacent to each other on a lake, just outside of Memphis, that I am hoping to buy. But obviously I don't know what I don't know.

The 1st park is on the market for $479k. It has 18 lots, all of which are strictly ground leases. It brings in $5,415 in revenue. Around 14 lots are on well water, and 4 are on community water. Property taxes are around $2,900 a year. Around $200 for waste removal and $40-75 for electricity for the well per month. It has some work that needs to be done to the roads, which would probably cost around 10k. It has not been well kept up, as the owner is getting old and has some health issues.

The 2nd park is adjacent to the 1st and has 11 lots where he owns the homes and rents the land and homes out. This is off-market; he has not listed it, but he knows the 1st seller and says he would also like to sell for $350k. Revenue is $5,725. Property taxes are around $1,500 a year. $150 dumpster fee, $580 maintenance, $100 propane tank, $125 utilities, and $170 miscellaneous. This is what the owner provided as a P/L, but they are all just estimates, as neither has kept updated books.

Both sellers do not want to seller finance and do not have updated books, so I doubt I could get any type of bank financing. I am assuming that leaves me with just finding a cash partner. I think the 1st property realistically would sell for around the $420k mark, and the second seller would probably take a slight discount as well. The realtor said there is room to negotiate for sure.

I am trying to put as much information about this out as possible to see what I am missing. And especially about the hidden things that I do not know. Especially like septic and plumbing systems and such that could be money pits if in bad shape. Would love for some things to look out for as I continue talking to the agent. Stuck between if this is a good deal or not just because of the lack of experience in the field.

Thank you to everyone who takes the time to read and help! I am very open to learning as much as I can. Thanks!!