Manila, Metro Manila · Member since 2016 · 1 post · 0 votes
I am newbie looking at jumping into my first park. I have been scouring the web and found one that seems to good to be true.
- 17 lots ($200 per lot)
- 100% occupancy
- 0 seller owned homes
- tenants pay city sewer/water/metered electric
- Annual taxes = $1300
- Owner asking $265k
It seems like I would only have to pay for trash and lawn care. I spoke with he owner and he stated that many of the units are owned by the same individual and rented out to tenants. I am worried that this person my have too much power in the area. Does this deal seem to good to be true or am I missing something?
Rental Property Investor · Clarkston, GA · Member since 2012 · 2k+ posts · 1k+ votes
10y
I'm not going to analyze your deal but help you this way: there's a mobile home and park forum dedicated JUST to park analysis. Repost there.
Better: read back a few months over that past deal analysis.
Biggest mistake new folks do: is cap rate home rent. Bank appraisers will only cap rate lot rent. Typically this will cut the asking price in half. Do some study in the other forum first. Go read before asking what "cap rating home rent" means.
Specialist · Milford, ME · Member since 2016 · 630 posts · 378 votes
10y
Looks good, just have someone competent to check infrastructure. You need to know condition of electrical services, sewer and water. Although it is on city water and sewer, you may be responsible for what is within the park. Call the local water and sewer district for details. Also it would be good to get visual on homes to make sure they aren't liabilities. Also request copies of 2 or 3 months bank deposits to confirm tenants are paying . Also call local code enforcer for his assessment. If these check out you should be good. Don't forget to research reputable management.
Rental Property Investor · Clarkston, GA · Member since 2012 · 2k+ posts · 1k+ votes
10y
I'm not going to analyze your deal but help you this way: there's a mobile home and park forum dedicated JUST to park analysis. Repost there.
Better: read back a few months over that past deal analysis.
Biggest mistake new folks do: is cap rate home rent. Bank appraisers will only cap rate lot rent. Typically this will cut the asking price in half. Do some study in the other forum first. Go read before asking what "cap rating home rent" means.
Rental Property Investor · Clarkston, GA · Member since 2012 · 2k+ posts · 1k+ votes
10y
LOL, glancing at your numbers I come up with value of $238k. :) Since you are saying 100% lot rent.
Repost in the MHP forum. But guessing, there's some hidden expense lowering the sellers ask that I can'g guess.
Due dilligence will have you call / visit face to face county commissioners AND the operating permit office to verify the park is in compliance with permits to have a legal park etc. IE there;s tons i\of illegal parks and it ok to operate but very difficult to sell.
In the MHU forum you'll read advice to buy the due dilligence kit from mobilehomeuniversity dot com. We did, and went to boot came (all 3 of us).
Assuming no legal or permit issues or no recent cease and desist letters (sellers have no obligation to tell you or even be honest about the books). I'd offer $225k in writing with proof of funds. IE a credible offer. Always make credible offers! Its a waste of time to give verbal offers and walk away after invariably you are rejected. The seller will respect proof of funds and a written offer.
Raleigh, NC · Member since 2015 · 54 posts · 23 votes
10y
The question I would be asking is, if most of the mobile homes in the park are owned by one individual other than the park owner and rented out to the occupant why isn't he/she buying the park?
MHP Investor · Green Valley, AZ · Member since 2013 · 85 posts · 26 votes
10y
*The question I would be asking is, if most of the mobile homes in the park are owned by one individual other than the park owner and rented out to the occupant why isn't he/she buying the park?
It might make more financial sense for them not too, ask the seller if its a lonnie dealer (homes are being held as notes) or if this person is just charging them all rent (which would be peculiar)
Rental Property Investor · Clarkston, GA · Member since 2012 · 2k+ posts · 1k+ votes
10y
We just bought a park where a lonnie dealer brought the deal to us and owns most of the homes. Lots of reasons why a lonnie dealer doesn't buy the park.
- doesn't have 30% of the ask for the down
- isn't bankable for the loan.
Otherwise I'm sure lonnie dealers would be buying lots of parks.