Opportunity to Purchase a Small Mobile Home Park and am Looking for Some Input

Upstate New York, New York
Mobile Home Park Investing
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Opportunity to Purchase a Small Mobile Home Park and am Looking for Some Input

Tim Braun
Flipper/Rehabber · Union Springs, NY · Member since 2019 · 32 posts · 17 votes

Good morning all, first post!

I have been rehabbing/flipping mobile homes in parks for a little over a year now, I would say I've been doing okay - making mistakes, getting better, and learning along the way. My goal is to do this as long as it makes sense to build up some working capital then move over to doing houses to purchase multifamily buy-and-holds. I came across a small "park" that I may have the opportunity to purchase with seller financing - bear with me I'm just getting started in real estate investing, I wanted to see if I could get some opinions on it.

It looks like its got enough space and has 6 pads, the owner says it can do 11 (some of its a little overgrown and I haven't walked the property yet. There are currently 4 homes on the lot: 3 vacant and one tenent-owned that is paying lot rent. Maybe the 3 homes can be fixed up to be occupied, maybe not, I should know that soon. That lot rent is average for the area from what I've seen. Its got public water and sewer, its in a smaller rural town but I've been working the area and I think there is enough demand to fill it.

I've started researching the code for the town and I'm working on getting someone on the phone to clear some things up - what its currently licensed for, what happens if I buy it, am I grandfathered in to anything, etc. I'm working on going over to the property in the next few days to check it out, see how many hookups there are and what condition they are in. Is there any thing else to consider? Any mistakes anyone else has previously made that could be passed on?

My "exit" strategy is to fill it with homes and manage it properly - if the 3 aren't too far gone then I can fix them, sell them, and rent the lot ASAP. I also have another free home that I can move to the park soon. Then I'll fill the remaining spots, likely with used homes in good condition. I think if I can fit 6 homes in it then it would be a decent hold for the 2 acres it is, but if I can get 11 homes in there then I could possibly sell it too. Any thoughts?

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Bryan S.
Member since 2011 · 92 posts · 40 votes
3y

Great stuff by the other BP members!

Definetly zoning and environmental confirmation ahead of time. Along with any other open permits / tax liens / check county for footprint / normal stuff   

BP did a podcast on it too - #345 that was pretty good. 

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  • Kerry Noble JrPro Member
    Investor · Indianapolis, IN · Member since 2018 · 2k+ posts · 1k+ votes
    3y

    With opportunities like that.....commit and then figure it out as you go.

    1Reply
  • Eugene Fedotov
    Member since 2021 · 34 posts · 16 votes
    3y

    1. When you are dealing w municipality, try to get everything in writing. If it is not on paper it does not exist. The official you are talking to now may not be around or suffer from "amnesia".

    2. If you intend to sell mobile homes, you will run into Dodd-Frank Act. You will need an attorney who is familiar w it.

    3. Test your market by placing Craigslist adds and see how many responses you get. 

    2Reply
  • John Boutros
    Investor · Member since 2021 · 113 posts · 56 votes
    3y
    Quote from @Tim Braun:

    Good morning all, first post!

    I have been rehabbing/flipping mobile homes in parks for a little over a year now, I would say I've been doing okay - making mistakes, getting better, and learning along the way. My goal is to do this as long as it makes sense to build up some working capital then move over to doing houses to purchase multifamily buy-and-holds. I came across a small "park" that I may have the opportunity to purchase with seller financing - bear with me I'm just getting started in real estate investing, I wanted to see if I could get some opinions on it.

    It looks like its got enough space and has 6 pads, the owner says it can do 11 (some of its a little overgrown and I haven't walked the property yet. There are currently 4 homes on the lot: 3 vacant and one tenent-owned that is paying lot rent. Maybe the 3 homes can be fixed up to be occupied, maybe not, I should know that soon. That lot rent is average for the area from what I've seen. Its got public water and sewer, its in a smaller rural town but I've been working the area and I think there is enough demand to fill it.

    I've started researching the code for the town and I'm working on getting someone on the phone to clear some things up - what its currently licensed for, what happens if I buy it, am I grandfathered in to anything, etc. I'm working on going over to the property in the next few days to check it out, see how many hookups there are and what condition they are in. Is there any thing else to consider? Any mistakes anyone else has previously made that could be passed on?

    My "exit" strategy is to fill it with homes and manage it properly - if the 3 aren't too far gone then I can fix them, sell them, and rent the lot ASAP. I also have another free home that I can move to the park soon. Then I'll fill the remaining spots, likely with used homes in good condition. I think if I can fit 6 homes in it then it would be a decent hold for the 2 acres it is, but if I can get 11 homes in there then I could possibly sell it too. Any thoughts?


     Whatever number of pads the seller says the park can have can be nonsense. What matters is what the city says the park is zoned for. Id recommend (strongly) getting a zoning letter from the city clarifying if park is grandfathered (and current status), number of pads, sunset provisions, park violations, and so on...what happens typically (especially in small towns) they can make up rules as they go and enforce them arbitrarily - get everything in writing, so you're not bullied down the line. Trust me on this one. 

    I would also obtain a phase 1 environmental test performed to ensure grounds aren't contaminated, if they are - run! City can shut you down immediately, to correct ground contamination can easily cost $1M. Worth also inspection water/sewer lines professionally to make sure they're not crumbling or need extensive repair soon. Survey is also a smart idea. The point is - make sure you do your proper due diligence. Good luck. 

    2Reply
  • Bryan S.
    Member since 2011 · 92 posts · 40 votes
    3y

    Great stuff by the other BP members!

    Definetly zoning and environmental confirmation ahead of time. Along with any other open permits / tax liens / check county for footprint / normal stuff   

    BP did a podcast on it too - #345 that was pretty good. 

    2Reply
  • Tim Braun
    OP
    Flipper/Rehabber · Union Springs, NY · Member since 2019 · 32 posts · 17 votes
    3y
    Quote from @John Boutros:
    Quote from @Tim Braun:

    Good morning all, first post!

    I have been rehabbing/flipping mobile homes in parks for a little over a year now, I would say I've been doing okay - making mistakes, getting better, and learning along the way. My goal is to do this as long as it makes sense to build up some working capital then move over to doing houses to purchase multifamily buy-and-holds. I came across a small "park" that I may have the opportunity to purchase with seller financing - bear with me I'm just getting started in real estate investing, I wanted to see if I could get some opinions on it.

    It looks like its got enough space and has 6 pads, the owner says it can do 11 (some of its a little overgrown and I haven't walked the property yet. There are currently 4 homes on the lot: 3 vacant and one tenent-owned that is paying lot rent. Maybe the 3 homes can be fixed up to be occupied, maybe not, I should know that soon. That lot rent is average for the area from what I've seen. Its got public water and sewer, its in a smaller rural town but I've been working the area and I think there is enough demand to fill it.

    I've started researching the code for the town and I'm working on getting someone on the phone to clear some things up - what its currently licensed for, what happens if I buy it, am I grandfathered in to anything, etc. I'm working on going over to the property in the next few days to check it out, see how many hookups there are and what condition they are in. Is there any thing else to consider? Any mistakes anyone else has previously made that could be passed on?

    My "exit" strategy is to fill it with homes and manage it properly - if the 3 aren't too far gone then I can fix them, sell them, and rent the lot ASAP. I also have another free home that I can move to the park soon. Then I'll fill the remaining spots, likely with used homes in good condition. I think if I can fit 6 homes in it then it would be a decent hold for the 2 acres it is, but if I can get 11 homes in there then I could possibly sell it too. Any thoughts?


     Whatever number of pads the seller says the park can have can be nonsense. What matters is what the city says the park is zoned for. Id recommend (strongly) getting a zoning letter from the city clarifying if park is grandfathered (and current status), number of pads, sunset provisions, park violations, and so on...what happens typically (especially in small towns) they can make up rules as they go and enforce them arbitrarily - get everything in writing, so you're not bullied down the line. Trust me on this one. 

    I would also obtain a phase 1 environmental test performed to ensure grounds aren't contaminated, if they are - run! City can shut you down immediately, to correct ground contamination can easily cost $1M. Worth also inspection water/sewer lines professionally to make sure they're not crumbling or need extensive repair soon. Survey is also a smart idea. The point is - make sure you do your proper due diligence. Good luck. 


     Thanks John, I am working on seeing what the town knows. Typical small town, someone said the place has a permit, another department doesn't know about it. One tells me how many homes I can have, the other asks me how many I want to put there.

    Good call on the inspection too, I am working on getting someone out there to see if they can inspect the water and sewer lines. I have no idea what it would cost to run new lines, its only a 1.5 acre lot but I can imagine it would get pretty expensive.

    0Reply
  • Tim Braun
    OP
    Flipper/Rehabber · Union Springs, NY · Member since 2019 · 32 posts · 17 votes
    3y
    Quote from @Bryan S.:

    Great stuff by the other BP members!

    Definetly zoning and environmental confirmation ahead of time. Along with any other open permits / tax liens / check county for footprint / normal stuff   

    BP did a podcast on it too - #345 that was pretty good. 


     Thanks Bryan, I listened to it, it was good.

    0Reply
  • Tim Braun
    OP
    Flipper/Rehabber · Union Springs, NY · Member since 2019 · 32 posts · 17 votes
    3y
    Quote from @Eugene Fedotov:

    1. When you are dealing w municipality, try to get everything in writing. If it is not on paper it does not exist. The official you are talking to now may not be around or suffer from "amnesia".

    2. If you intend to sell mobile homes, you will run into Dodd-Frank Act. You will need an attorney who is familiar w it.

    3. Test your market by placing Craigslist adds and see how many responses you get. 

    Thanks Eugene.

    I am doing my best to get everything in writing, I am used to doing that in my day job, the problem is getting everyone else to do it.

    Thanks for the tip, I have been selling used mobiles in the area and I am careful with doing so. This is always important to keep in mind though.

    I don't expect this area to be booming with tenants, but I am focusing on it because there has been a demand - I have been working in the area for a bit now selling mobiles in other parks 
    0Reply
  • Tim Braun
    OP
    Flipper/Rehabber · Union Springs, NY · Member since 2019 · 32 posts · 17 votes
    3y
    Quote from @Kerry Noble Jr:

    With opportunities like that.....commit and then figure it out as you go.


     That was my thinking too Kerry, I'm trying to let the project manager in me take the reigns and mitigate as much risk as possible though!

    1Reply
  • Kerry Noble JrPro Member
    Investor · Indianapolis, IN · Member since 2018 · 2k+ posts · 1k+ votes
    3y
    Quote from @Tim Braun:
    Quote from @Kerry Noble Jr:

    With opportunities like that.....commit and then figure it out as you go.


     That was my thinking too Kerry, I'm trying to let the project manager in me take the reigns and mitigate as much risk as possible though!


     Go for it!!! what do you have to lose?

    1Reply
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