Mobile home park ,Would you buy it?

Question

Let me start by saying this will be my first deal with real estate investing

I am looking at a mobile home park with 18 pads and 1 house

13 pads are rented so is the house

All mobile homes are tenant owned

The park is on a community  well and water treatment system

Owner pays water/ sewer/ trash ,and any repairs for house

This sets on 4 acres

Asking price 180000

Gross cash flow 2000.00 per month

Ryan Groene · Answer

Keep on driving past the park and don't look back.....

because of the cost of private utilities, your better off buying a 13 unit apartment building, 13 single family homes, or something else.

MHP's this small will not hardly make any money.  The only ways i would do this deal was to get this deal with no money down and financed for eternity.  or if the city will pay for connection to city water/sewer and will bill it directly

that is the only way this deal makes sense from a risk/reward prospective.  once those utilities go bad, your not going to be able to sustain the capital expenditure to replace each of the well's or the waste Water treatment system.  what type of waster water treatment system are you looking at???  septic, lagoon, waste water treatment plant...or combination of 2 or 3  of them.

Private utilities are a headache and cost way more per lot to operate than city water/sewer...that is why it normally doesn't make sense financially to buy a private utility park below 50 units or if you have one of the utilities on city.

Ryan Groene · Answer

it could be a waste water treatment plant. Or a sewage lagoon.

this has a red flag nightmare written all over it.... those numbers are the sellers....and are not how these things are run...

This is not investment advice...but please do more research about private utilities before you purchase this.

Your going to run closer to 60-70%expense ratio to run this.  Unless the seller is the legal operator on both the well and sewage. It’s going to cost you way more to run.

You will literally be shoveling sewage to run a treatment plant. And you will be adding chemicals to the well and doing the testing to run it and fill out the paperwork that the state requires. Same goes for sewage.

Jay Hinrichs · Answer

concur I am not a MHP expert I have only owned 5 of them  but the one on private utls was a NIGHT MARE on elm st.. NEVER again.. simply not worth the risk..

Account Closed · Answer

@Levi Edgy I would only ever invest in a Mobile Home Park if it was on city sewer and water. Septic alone can bankrupt you.

Levi Edgy · Answer

it’s a mom and pop deal they   literally have not raised the lot rent in 15 years

Their Son is selling it

I was in Negotiations with them but backed out after getting your guys advice

Thank you to everyone that replied

Jay Hinrichs · Answer

the one I had in Oregon the drainfield expired IE came to the end of its natural life and I had to not only replace but have a 100% failure area which I had to then finagle with a neighbor had I not been able to do that I would have had to close the park.. 250k is what that cost..

Now in the mid west and deep south were these parks are dime a dozen its not that critical like west coast we have some pretty strict DEQ type regs out this way.. but regardless that was a one and done for me personally.

Jay Hinrichs · Answer

Not sure if yours are in the US or CA..  But CA is light years ahead of the US in private sewer and water systems.

that all said.. in the US you have one fail and on these small value parks it can cost as much as the whole park to fix them..

so for me city sewer and water is a must..  and the bigger owners I know they have the same criteria..

Mobile home park ,Would you buy it?

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