Updated over 3 years ago on .
2nd Mobile Home Park Investment
Investment Info:
Mobile home buy & hold investment.
Purchase price: $360,000
Cash invested: $60,000
18-Lots mobile home park
What made you interested in investing in this type of deal?
We purchase a mobile home park last year and the return was extremely good so we invested in another one.
How did you find this deal and how did you negotiate it?
Online MH store
How did you finance this deal?
We took cash out refi from our first park and used the proceeds to pay for the downpayment. Bank financed 52% as 1st position and seller financed 40% as 2nd position at 1.5% interest with balloon payment in 5 years.
How did you add value to the deal?
Combination of creative financing to lower the cash upfront. Slowly raise the rent and reduced the cost by passing utility expenses to the tenants. Also rehabbing vacant homes and either renting them out or selling them. We are also planning to talk to city for potential expansion or full utilization of the park.
What was the outcome?
So far, things are going according to plan. Most tenants are staying despite the increase in rent and expense reimbursements. 2 tenants are moving out but we are confident we can rent or sell those units quickly. Two units are currently rehabbed that will bring in additional $2000+ of rent.
Lessons learned? Challenges?
Park is in well water and septic therefore we are only limited to a number of units that the well can support. Zoning is also an issue since the city has changed the zoning and we are currently grandfathered. Adding more units or setting up RV parking might be a challenge due to these restrictions.
Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?
Worked with local attorney and local credit union.
