Mobile Home Park - Can I put an RV on the pads?

Question

Hey guys, I'm currently in contact on a MH park in TX (I prefer not to disclose exactly where)... The park has quite a few vacancies, and I would like to fill some of the spots with RVs. Is there anyone who has done this before and wouldn't mind providing some advice? I'm guessing I can press forward unless the municipality it is in specifically says I can't?

Brenden Mitchum · Answer

Hey @Carl Dieckmann!

@James Dickens brings up some great points. However, I will go ahead and assume in my response that you're planning to make these pads available to folks who have RVs, rather than bring in POH RVs, which sounds like an absolutely nightmare.

So, we are doing exactly what you're asking about in a couple of our parks. This is not a long-term solution but rather a way to generate cash flow while we search for MHs to fill our vacancies. Our exit plan does not involve more than a few RVs because the banks don't look at mixed parks very favorably unless the RVs are long-term residents.

That's the why. The how is to first start with your municipality and make sure they allow you to bring RVs onto existing MH pads. The next step is to prep the lot for RVs. First, you want to make sure utilities are ready for an MH down the road (if you want to bring one in eventually), i.e. upgrade to 200 amp & replace bad lines while you have a vacant lot. Next, you'll need to make sure there are RV hookups, including a 50 amp hookup from the electrical. After the utilities are squared away, you'll want to prep the earth. If you already have a nice concrete pad or gravel, you're good to go. However, you may need to add some gravel and level the lot. Make sure you put in any necessary concrete pads/piers now if you plan on bringing in new homes down the road! Lastly, make sure you've protected your utilities from any errant RVs.

Now, put these up on Campspot or your preferred site and make sure you have a park manager competent and trustworthy enough to help you manage this new income source.

Hope this helps a bit. Please, feel free to reach out anytime if you have other questions or just want to chat MHP!

James Dickens · Answer

@Carl Dieckmann I'm not an MHP owner but I am an underwriter for a nationwide broker and have seen a few of these come across my desk in recent weeks and at least one has been in Texas.

Here are some questions that come to mind.

Are you planning on filling spots like an RV park where owners bring in their own RVs or are you planning on purchasing and placing and renting them like a Park Owned Home? I would assume the latter but want to be clear. I have seen where owners split out the ownership to a separate LLC for the home and operate them almost like a lonny dealer and the park LLC only shows pad value.

Are you going to change/modify the hookups on the pads for RV's

Do you plan on exiting out of the RV's and replace with MH at some point and if so do you think you will be able to recoup the cost of the RV (again depending on if you will be buying and placing). POH-type rental on an RV will take a toll quickly. Also, repairs will be more costly because of the special nature of it being an RV.

If you have a mix of units on exit how are you going to market that? MH/RV mix parks usually don't show well.

Also know that with RV's your electricity will be expensive compared to MH. If you plan to have long-term direct billed that's one thing but if you will be doing month to month or less you will want to have a system in place to recapture that cost.

Would it be an option to move it to 100% RV's?

I would be concerned that the option of quick short-term cash/growth will be outweighed by the headaches you will have over the long run and at exit. Just my 2 cents here.

Clark Love · Answer

My business parter and I own multiple mobile home parks. Using RVs has been a great way to fill vacancies for us.  RVs are easier to get and easier to remodel, and it costs a few hundred dollars to move them on site and set, rather than a few thousand like it does for a MH.  We have rented lots to Tenants that bring in their own RV and we have purchased multiple RVs that we have leased RTO.  Both have worked well.  The one catch is municipal regulations.  You should check your local regulations closely.  Some cities/counties might not allow an RV in a mobile home park.  The water and sewer hookups are the same.  You will need to add a 30Amp or 50Amp box, which often costs a few hundred dollars.

With all the folks that bought RVs during the COVID Lockdown, I expect we will see a wave of used RVs on the market in coming years.  (Folks tend to sell them after they have paid storage fees on them for 2-3 years).  We plan to fully capitalize on this trend.

RV's aren't really made for full-time living arrangements, so they will not have the same useful life as a MH.  However, given the lower purchase price, it should be worth it.

Mike Reynolds · Answer

Yes, you can Carl. But some considerations to think about. Most RVs are 30-60 AMP. Most trailers are 100-200 AMP. You will need add a breaker for a proper size plug in for the RV you plan to install. Then install an RV plug for that breaker.  I would leave the pole there and get a licensed electrician to install them off the main pole. A 30-60 AMP breaker to a plug should work fine for this. You will also need to have a water spigot and a sewer opening for an RV instead of everything closed. Unless you plan on leaving them there forever and then just hard pipe it on both accounts.

Of course, you would need to find out the codes and ordinances of the area first.

Ali Kassam · Answer

I don't own a park that's half and half but I'm living in my RV in a mobile home and RV park that has over 300 spots.  There is a combination of RV's and Mobile homes.  The park charges the same lot rent for tenant owned homes and for RV's.  I think adding RV hookups would be a great way to quickly fill the vacancies in your park, and retroactively adding RV hookups should be pretty cheap since you already have all the connections to the lot already.

Brenden Mitchum · Answer

@Carl Dieckmann I've never converted an entire park to RV, which is what it sounds like you're leaning towards. We are currently making some of our vacant lots "RV friendly" but that is only a temporary income generator until we can get MHs on them. When we go to sell we plan on being almost entirely MH.

Carl Dieckmann · Answer

Brenden, great info. much appreciated. Any chance I can see a website example of a park you converted?

Carl Dieckmann · Answer

James, great points. My initial thoughts were an entire conversion to RVs with a direct bill. After a short conversation with the city dir of dev services, we think this can be done. My concerns about filling spots with RVs we own would be long term maintenance. I very much appreciate your inputs!

Mobile Home Park - Can I put an RV on the pads?

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