Tiny Mobile Home Park

[Sanford Myers]

I have an opportunity to purchase a small mobile home park with 3-4 pads. There is currently only 1 mobile home on the property. It is a 1973 12 x 66 3 BR, 1 Bath that basically needs to be gutted. It needs new flooring (mostly good subfloors with a couple of patches needed), new paneling/sheetrock vs painting existing paneling, kitchen cabinetry, appliances, hvac, and paint inside and out. Total package is $35k before repairs. My plan is to buy and hold, renting the first mobile home, and adding two more to the existing spaces as I am able to increase cash flow. I’m afraid I’m getting into analysis paralysis as I try to figure out just what it will cost me to make the existing mobile home rent ready. Anyone got experience with a similar deal? How much did the renovation/repair cost you? How long does a typical Mobile Home renovation of this magnitude take? Any advice would be appreciated!

[Andy Andrews]

@Sanford Myers I’ve been managing a small mobile home park for the last 6 years. 30 lots. When I took over management, only 1/3 were owner occupied, the rest rentals. Managing the rentals has been an exhausting money losing endeavor. It has been extremely difficult to, first, find good tenants, and second, keep them. Our experience has been that renters have no investment in the home, and when they turn over I’m putting so much back into them that it’s barely a break even operation. And that’s not counting all the time I’m spending finding tenants, collecting rent and going to court.

However, once the tenant owns the home everything changes. They keep it up nice, maintain it outside, add landscaping and so on. We are now 27/30 owner occupied with the remaining 3 on lease options. The park has completely transformed!

I would never consider anything that involves renting mobile homes. Have them buy the existing or bring in their own homes. You do very little and collect lot rent. We are now running solidly in the black.

Run your numbers and if you price your lot rents close to your local market prices and the park is priced right, you should have a cap of 8% or better. Around here we get $300/month and they pay for water (and all their utilities of course). All we do is cut the grass and plow snow. Mobile home park investing can be very profitable if done right!