Dumpy Mobile Home Park

9 Replies

Came across a dumpy little mobile home park today for sale for $47k.

6 lots 5 with homes and one empty.  All park owned homes.  All on city water and sewer.

#1 Rented for 400.  #2 rented for 350 #3 Undergoing renovation and not rented. #4 empty, no home #5 rented 350 and #6 rented 400.

What do you all think the likely hood is of getting the tenants to convert to a rent to own situation?  I was thinking of a lot rent around $150 should be doable.  

So 150*4(rented lots*)*12*.7(30% expense reserve)*10=50,400.  Seems like a good price on the park. At a 10 cap I would be getting free homes.  Now understand that these are not nice 2015 model homes but fairly old single-wides but free is free right.


And having never bought a mobile home park before how does diligence work?

Updated over 3 years ago

Looks like the current owners paid $29k for the park in 2009.

Is the water/sewer billed back to tenants?  If not, expenses could be much higher.  40% expenses would be a good guess, but make sure you verify.  That assumes a 10% water/sewer usage.  I'm looking at a park that water/sewer cost is 25% of income!  

And be aware of the competition -- you may or may not be able to pass on costs, depending on your lot rent and that of the other parks nearby.

Turns out the park pays the water and sewer. According to the listing agent the bills is about $500/month! Seriously changes the NOI.

Tim -

Stop!  Get yourself educated.  Get to Frank & Dave's Bootcamp.  Don't do any deal until you get smart about this complicated space.  The diligence process must be done correctly - water pipes, sewer pipes, home inspections, competitive research, research on any violations, running test ads, researching the economy, etc., etc. Small deals like this DO NOT trade at a 10% cap rate.  More like 15%.  And I'm not even sure it's worth that depending on the condition of the homes and what market it is in.

@Jefferson Lilly

Are you aware of any similar bootcamps on the east coast?  Frank and Dave's is literally on the other side of the country.

Hi Tim, Frank and Dave are doing one in Chicago in June and then one in Charleston, SC in October. Maybe I will see you there, I'm in North Carolina.


@Janene Tompkins

Thank you for the information.  Charleston sounds like a winner!  Ill see if I can find the dates so I can put in for some time off.  Thanks again and see you there!

Frank & Dave do their Bootcamps about six times a year in various cities nationwide.  They are curiously secretive about the future dates/locations, but you can contact Brandon Reynolds and ask him to tell you exactly when/where the upcoming Bootcamps are.  Tell him I sent you.


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