Rookie taking action!

[Jacob Davis]

Hello everyone! New to the site but not new to the podcasts Atleast, sadly I tried posting on the BiggerPockets.com/new just to introduce myself but the page was unavailable so here I am. As the title states I’m just beginning in my real estate career and I’m very anxious yet excited to get the ball rolling. I’ve learned all I think I can without actually diving in, and I believe I’m on a great start. A local investor I randomly came in contact with is wanting to sell me his mobile home park (only 6 to 7 units) but I thought that would be a great opportunity to just get started. Credit and large finance wise I’m shot for starting out but I still believe there is a way I can make this happen, so long as the deal is good. I will be checking out the property tomorrow evening and hopefully getting better insight as to what I’m getting in to. So I must ask, is there anything I should be wary of getting into this kind of property? And if I am able to purchase, what sort of “terms” should I strive for? Thanks in advance for the feedback and thank you as well for reading this all the way through. Happy hunting my fellow dreamers!

[Joshua Diaz]

Hello! Welcome to Biggerpockets !

The good news about commercial deals (which is what you are doing with buying that mobile home park) is that it is less based on your personal finances and instead focused more on the deal itself. 

That being said , the first thing you should be focused on is education on your desired niche. Which seems to be MHP.  The due diligence is super important.  The first thing you want to do is make sure the area isn’t in decline.  Take the zip code of it, go to bestplaces.net and type it in.  Then go to the metro area of that zip code.  What you are looking for is a large population (100,000) , median income of $40,000,  average real estate prices of at least $100,000, and decent rental rates of a 2 bedroom apartment which is what your lot rents are based off of. (The lost rent is by rule of thumb half that of an2 bedroom)

You can run the park however you wish but the general idea is to own the land and not the homes themselves.  You would collect lot rent and not deal with the hassles if the homes themselves.

Also definitely make sure the park is legally allowed to be a park and verify the spaces it has.   Verify if it’s on city water/sewer, if it has any liens against it, of the phase 1 environmental survey comes back ok, how the utilities are, if the profit and loss statements are accurate, and anything else that the park has.  (Some parks have additional buildings, for example)

Just a quick tip: a park that is nearby a walmart or super Walmart is an indication of a decent area.  The Walmart people spend tons of money to analyze an area before they put a store there so piggyback off their research.

Hope this helps!