All Forum Posts by: Jeffrey H.

Look into a couple things: 1) ultra small towns typically do not have zoning regulations (e.g. think under 1,000 population); 2) in the ETJ of a larger city there is not zoning regulation until it has been annexed, but if you are close to city limits they will have public utilities extended there for future expansion.  Sometimes the utility rates have a premium in these areas, but it addresses your issue.

Let us know how it goes.

There are some people on BP that have luck renting RV's to construction type people, or just rent the dirt like an RV Park but monthly rents only.  If the demand is good it's a low overhead model if you can get long term tenants.  Just depends on your market (and zoning).  Good luck.

I can't speak to your market, but here in Texas there are several banks that will lend on a mobile home that has been moved and does not have concrete type skirting - the terms are typically like a 6-8% note with 25% down and 10-12 year amortization.  In this case you did not need to use the land as collateral for the home, but some banks might do that as well.  

But for FHA loans specifically the home must be from the factory on location, have the tongue and axles removed, and ideally have a mortar-based skirting, which means a 12x12 inch concrete base under the skirting around the perimeter of the home.

You see people offer these up for free as hunting cabins too.  You can hit local hunter forums and may get lucky.  But like others said even moving these a short distance will cost 5k.

I have done similar deals, but the economics have never made sense to install well and septic out of town.  You're looking at 10-15K for both of those to be installed and connected to the home, which will probably be about, or more, than the land cost.  

Why not find a piece of land in a small town (e.g. under 1000 people) with public utilities and move one there - these towns typically don't have zoning when that small, but always confirm.  That runs about 3-5K for tap fees, labor, etc to get setup instead.  Put that 10K difference back in your pocket.

Financing a used mobile home is possible with well qualified buyers, but be prepared to carry the note as a backup if that doesn't work out.

Park owners will collect rent regardless if the tenant chooses to live there full time or part time - it will be your problem to make that work as part of the deal.  If the market rents will not drastically offset the hot season lot rents then I would look at a year round tenant instead.

Be careful with the Park's subletting requirements.  Some of these are so strict that it can be impossible to find a tenant at the price you want to make the economics desirable.  What is your backup plan if that happens?

I'd also suggest you only do one deal in this park and let that finish before you do another one. Calculate and quantify your costs and benefits before getting too heavily invested in a single Park.  If it does not go as well as expected and you find out something you don't like about this Park, you just unload your one unit and wash your hands of it.

Whenever I am investing in a new market where the demand is unknown I use a test advertisement on Craigslist or in the newspaper to see how many phone calls I get.  If you're getting an average of 3-5 per day over a week you're probably going to fill the unit at the price mentioned fairly quickly.

Good luck.

I have done some diligence on Parks exactly like this - the POH are a disaster and you're going to end up effectively moving all the POH out of there since they're already worthless and have to move in nice(r) ones so you can get better tenants and rent rates.

Also when you're renting like that the area typically isn't nice and there is lots of crime, which means you have to spend money on fences and bushes with stickers to deter people that want to smoke crack in your homes when they are vacant.

Capital intensive and cannot get financing.  Lots of upside, but there are Parks with fewer headaches out there.  Check out the Mobile Home University (MHU) Due Diligence Manual if you have not already - worth every cent.

Assuming this is in city limits - my first call would be to the zoning department to check if the park is grandfathered, and if so, whether a sunset provision has kicked in due to zero occupancy for 12 or 18 months - which could render the property useless as an MHP.  Until that is answered, no, I would not do this deal.

If it's outside the city then the other advice on demand, utilities, etc is needed to make a decision.

+1 for the Due Diligence Manual and it's purchase contract for MHP's.

@John Arendsen brings up an interesting preference for multi-section mobile homes versus singlewides.  There are more singlewides to be found and can get them for a lower initial price point, but doublewides on their own land are considered very desirable.

I would start with a singlewide in good condition year 2000 or newer just to get comfortable with the process.  Then you can take that and decide if you want to make an incremental financial commitment with a doublewide.