My first Mobile Home Park

Real Estate Deal Analysis & Advice
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My first Mobile Home Park

Corey BlockPro Member
Realtor · Port Neches, TX · Member since 2019 · 26 posts · 24 votes

Investment Info:

Large multi-family (5+ units) buy & hold investment.

Purchase price: $110,000
Cash invested: $22,900

This is a mobile home park that I purchased from a “mom and pop” that lived in and built the park. It appraised at $147,000 with rents WELL below market and operating at 35% vacancy. I have bought and moved in 3 new homes and plan to get the rents up and the park full then refinance and pull all my equity out to put to work.

What made you interested in investing in this type of deal?

I like the idea of just renting the land to residence and the 14 units spreads my risk.

How did you find this deal and how did you negotiate it?

I found this deal while networking with local real estate agents and negotiated the price down from $125,000 to $110,000.

How did you finance this deal?

I put 20% down and financed through a commercial lender that I have a relationship with.

How did you add value to the deal?

I have moved in 3 new homes and working to clean the place up.

What was the outcome?

Rents have doubled and the only problem resident has been removed. I am working to rebuild the main road in the park and have someone keeping up with the lawn and landscaping. So far, so good.

Lessons learned? Challenges?

Very important to have all the paperwork and policies in place, and be prepared to enforce them to the letter.

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

I did work with a realtor, but not one that I would recommend

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Most Popular Reply

Charlotte Dunford
Investor · Johns Creek, GA · Member since 2017 · 463 posts · 488 votes
6y

Congratulations! If you have any questions about MHP operations. I own 44 pads and getting more, and I would be glad to help!

5Reply
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  • Amy Aziz
    Specialist · Los Angeles, CA · Member since 2019 · 587 posts · 269 votes
    6y

    Congratulations @Corey Block!

    0Reply
  • Isaac S.
    Member since 2018 · 563 posts · 562 votes
    6y

    @Corey Block@Corey Block@Corey Block@Corey Block

    Curious, what was the deal with the one problem tenant?

    0Reply
  • Tim DelaneyPro Member
    Buffalo, NY · Member since 2018 · 790 posts · 530 votes
    6y

    Congrats!

    Podcast Guest on Show How to Buy Yourself a 6-Figure Income Stream
    0Reply
  • Corey BlockPro Member
    OP
    Realtor · Port Neches, TX · Member since 2019 · 26 posts · 24 votes
    6y

    @Isaac S. the one problem resident was an older gentleman that I believe had a problem with alcohol abuse and really didn’t like being told what he had to do.  He tried to push back on a few rules I put in place and of course didn’t like that I increased rents.  But fortunately he left on his own.   

    2Reply
  • Hai Loc
    Specialist · Toronto, Ontario · Member since 2012 · 2k+ posts · 891 votes
    6y

    @Corey Block

    Good job

    Does the park have public utilities?

    Do you own all the mobile homes?

    0Reply
  • Corey BlockPro Member
    OP
    Realtor · Port Neches, TX · Member since 2019 · 26 posts · 24 votes
    6y

    @Hai Loc, the park has 14 lots and a 2bed/1bath home, and only 2 park owned homes.   The park had 4 vacant lots and I recently purchased 3 like new 3 bed/1bath homes and have them set up to rent.   My plan is the rent them for a year or so then get them on a rent-to-own or owner finance type deal.   

    As for utilities, it has a water well and septic system...so I provide water, sewer, trash, and lawn care for the residence.   The municipal water district does provide service to my park, but I would have to go through the process of having meters installed and getting all the residents transferred over.   I will probably do that eventually, but for now I’m focusing on getting the park full and cleaned up.

    1Reply
  • Charlotte Dunford
    Investor · Johns Creek, GA · Member since 2017 · 463 posts · 488 votes
    6y

    Congratulations! If you have any questions about MHP operations. I own 44 pads and getting more, and I would be glad to help!

    5Reply
  • Corey BlockPro Member
    OP
    Realtor · Port Neches, TX · Member since 2019 · 26 posts · 24 votes
    6y

    @Charlotte Dunford where do you own your park or parks?   I am actually looking at another 12 and 16 lot park in my area.  

    I am also considering taking a partner or 2 and forming a separate LLC to purchase some parks. I have several close friends that have been watching what I do over the last few years and want to invest...but don't have the time or knowledge or desire to learn like I do. Hopefully I can find a way to bring them in as partners and really amplify my buying power.

    0Reply
  • Charlotte Dunford
    Investor · Johns Creek, GA · Member since 2017 · 463 posts · 488 votes
    6y

    @Corey Block that's awesome!! My are currently located in GA, and the midwest.

    0Reply
  • Hai Loc
    Specialist · Toronto, Ontario · Member since 2012 · 2k+ posts · 891 votes
    6y
    Originally posted by @Corey Block:

    @Hai Loc, the park has 14 lots and a 2bed/1bath home, and only 2 park owned homes.   The park had 4 vacant lots and I recently purchased 3 like new 3 bed/1bath homes and have them set up to rent.   My plan is the rent them for a year or so then get them on a rent-to-own or owner finance type deal.   

    As for utilities, it has a water well and septic system...so I provide water, sewer, trash, and lawn care for the residence.   The municipal water district does provide service to my park, but I would have to go through the process of having meters installed and getting all the residents transferred over.   I will probably do that eventually, but for now I’m focusing on getting the park full and cleaned up.

     I have a 60 unit park in Columbus area that has private utilities as well, that's why I asked. Its fine to have them but better to have public water and sewer. Just easier to maintain. My next goal is to get a park that is basically on autopilot.. All park owned homes just send lot rent checks every month.. They maintain their own homes and all I have to do is maintain the grounds. Not much involvement of the landlord. When acquiring the property do all the work in the first month and not have to worry about it for extended period of time.. 

    My current park I have to spend about 2 hours week with the management to make sure everything is on track.. Your management company can never manage the property the way you want it. 

    My next park I am hoping to spend 2 hours a month on it. 

    1Reply
  • Anthony Rosa
    Rental Property Investor · New York City · Member since 2019 · 703 posts · 538 votes
    6y

    @Corey Block - Congratulations and good for you!  Mobile homes are an area of interest for me and i don't know much about them. 

    How big is the MH park and how many MH can fit in the area? 

    What is your Cash on Cash ROI?

    Do you have a PM or maintenance staff on hand?

    0Reply
  • Corey BlockPro Member
    OP
    Realtor · Port Neches, TX · Member since 2019 · 26 posts · 24 votes
    6y

    @Anthony Rosa my cash on cash ROI is about 137.2%. After I took possession of the park and increased rents after a 60 day notice, this is what my return has been. I have had 4 vacant lots and just moved in 3 new homes and am in the process of getting tenants in them. Once they are rented my new cash of cash ROI will be 136%. I plan to lease them for a year or so then get them on an owner finance/rent-to-own deal.

    The park is a 14 lot park with now 5 park owned homes and 1 vacant lot. There is room to expand a bit as there is a home that is part of the park but not sold with it due to an agreement between the seller and the owner of the home. When the current resident moves, I will get the home. There is also a SFH that is on the property...it needs a little work, but once it is renovated I plan to refinance it to pull my cash out and have another rental unit.

    As for PM, I manage all my own properties.  There is a shortage of competent property managers in my area, which is why I am in the process of getting my real estate license and will start my own property management company.  

    1Reply
  • Corey BlockPro Member
    OP
    Realtor · Port Neches, TX · Member since 2019 · 26 posts · 24 votes
    6y

    @Hai Loc I agree that the perfect scenario is a park with zero park owned homes and municipal utilities all individually metered and paid for by the residents.  I am actually visiting with a seller about another park in my area that is set up for all municipal utilities, the only problem is that it is a run down park and would have to be cleared out and reconfigured to maximize the number of lots (which should be around 14 - 16).  Not sure that I want to take on a development deal right now, but it definitely has potential.  

    0Reply
  • Noah Mccurley
    Belfast, Northern Ireland · Member since 2018 · 128 posts · 56 votes
    6y

    @Corey Block

    I find the idea of investing in mobile home parks very interesting. Love the idea that all you need to get started Is land, utilities and some concrete to put the mobile homes on.

    0Reply
  • Hai Loc
    Specialist · Toronto, Ontario · Member since 2012 · 2k+ posts · 891 votes
    6y
    Originally posted by @Corey Block:

    @Hai Loc I agree that the perfect scenario is a park with zero park owned homes and municipal utilities all individually metered and paid for by the residents.  I am actually visiting with a seller about another park in my area that is set up for all municipal utilities, the only problem is that it is a run down park and would have to be cleared out and reconfigured to maximize the number of lots (which should be around 14 - 16).  Not sure that I want to take on a development deal right now, but it definitely has potential.  

     That sounds like a dream spot for a local cash investor who the time to redevelop as long as the area is solid.. I personally want something minimum 50+ units and 80% occupied.. 

    0Reply
  • Corey BlockPro Member
    OP
    Realtor · Port Neches, TX · Member since 2019 · 26 posts · 24 votes
    6y


    @Noah Mccurley it is definitely an interesting investment niche.  I kind of stumbled into this first park, but I have taken the time to educate myself and have really come to love this particular niche.  I plan to purchase more parks very soon.  

    0Reply
  • Corey BlockPro Member
    OP
    Realtor · Port Neches, TX · Member since 2019 · 26 posts · 24 votes
    6y

    @Hai Loc ideally I am looking for something that matches your criteria also, which is why I haven’t jumped on this other deal.  No sure I want to deal with the development.  It was nice closing on this park and start getting paid immediately.  

    0Reply
  • Susan Elliott
    Investor · White Salmon WA · Member since 2019 · 44 posts · 12 votes
    6y

    @Corey Block Cool deal. Awesome to see success stories with MHPs. I'm diving into this asset class now as I diversify from SFH and short term rentals. I assume this is a local park. How would this have gone if it were out of state? What drawbacks/difficulties do you think you would have encountered? Thanks for your insight!

    0Reply
  • Corey BlockPro Member
    OP
    Realtor · Port Neches, TX · Member since 2019 · 26 posts · 24 votes
    6y

    @susan 

    @Susan Elliott this was a local park, relatively local, and I’m not sure if it would have been any more difficult had it been in another state or area.  Of course there will always be fear and apprehension when investing in a property that is in another state, but I don’t know that the buying process would have been any different.  I did encounter an issue with the septic system on the property, and dealing with the TCEQ trying to get it cleared up, but the seller is working with me to find a solution and helping with the cost.  The issue is not resolved yet, but we’re working on it.  

    I would not be opposed to investing in a park out of state.  You just need a good manager and make sure you perform your due diligence.  I don’t know that I would buy another park that is not on public water and sewer.  

    0Reply
  • Susan Elliott
    Investor · White Salmon WA · Member since 2019 · 44 posts · 12 votes
    6y

    @Corey Block Got it. That's what I hoped your summary would be. It feels like an asset class that an investor would need to visitore frequently. But with a good property manager, I don't see why that would be necessary. Thanks!

    0Reply
  • Corey BlockPro Member
    OP
    Realtor · Port Neches, TX · Member since 2019 · 26 posts · 24 votes
    6y

    @Susan Elliott I would definitely visit the park before purchasing, but after that I think a good manager should be able to take care of the rest.  I manage my own, and even with this “problem” park, I haven’t really encountered any problems so severe that I couldn’t handle it.  

    1Reply
  • Hai Loc
    Specialist · Toronto, Ontario · Member since 2012 · 2k+ posts · 891 votes
    6y

    @Susan Elliott

    If you have the set up that I mentioned earlier

    Public utilities and all tenant owned homes..

    All you need is a reliable person to upkeep the grounds and have a system where tenants can drop of their monthly lot rent at a local bank.. preferably walking distance.. it's almost autopilot..

    You just need to spend all the neccessary cap ex upon acquisition so you don't need to worry about it down the road..

    If done right I would only make semi annual visits

    0Reply
  • Ola Dantis
    Multifamily Syndicator · Houston, TX · Member since 2016 · 1k+ posts · 2k+ votes
    6y

    @Corey Block Awesome job closing and starting to turn the park around!

    After speaking to @Charlotte Dunford, my interest has been peaked in MHPs. 

    That said, I am making sure that I don't get that shiny object syndrome!

    1Reply
  • David Bermudez
    Member since 2019 · 16 posts · 5 votes
    6y

    @Corey Block

    How did you determine the current value prior to purchase?

    There is a park local to me with 5 spots, 4 park owned and one empty lot. Only 2 are currently rented. They are asking north of 150k for it in Central Florida. Thinking it may be a bit high.

    0Reply
  • Charlotte Dunford
    Investor · Johns Creek, GA · Member since 2017 · 463 posts · 488 votes
    6y

    @Ola Dantis thanks Ola! :) I'm glad I could bring you closer to the wonderful world of MHP investing. Keep rocking it, Ola!! You are awesome.

    1Reply
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