western montana deal analysis

[Chris Mcmahan]

Hey all, I have an accepted offer on a 19 unit mhp in rural montana and now that SGR im in need of some opinions.  This would be my first rental property and first mhp.  Current rents bring in 6650/mo and according to my figures debt service and all expenses should be under 3500/mo.  Current rents are all about 100/mo under market rents.  My concern is its location.  Its in a town of about 600, 20 min from a town of 1200, 45 min from a town of 5400 and 60 min from kalispell which is apparently 26,000 but theres probably 60k in the kalispell metro area.  

The park is currently fully occupied and apparently the seller has a waitlist!  He also said "they all get checks".  So im guessing its all retired/disabled folks on fixed incomes.  Im afraid that even though this thing currently cash flows nicely, and rents could even be bumped up a bit... I may have issues filling the spots once they leave.  Kalispell has been growing rapidly the last few years and prices are absurd so this is definitely a cheaper alternative... but who wants to drive 45-60 minutes to work?  

Perhaps I could pivot and make it into an rv park or even kind of a remote work community if occupancy really fell off down the road.  What are your thoughts?

Thanks so much!

[Steve Vaughan]

I had a great 17 year rural investing experience.   Mine was a town of about 1200, 30 mins from 2 towns like Kalispell. It was 30 mins away for me and I self-managed.   

The good part was the deal referrals if you treat people right.  I never meant to be the largest unit owner anywhere, but folks would say if you're selling, talk to the apt guy.  

The hard part was finding quality contract work.   You will need affordable and reliable grounds and snow removal, septic magician, handyman, etc.  

Your demographic is retirees so I wouldn't worry too much about the commute.   I had 19 blue collar apts so commuting was def a concern for mine.  I learned pretty quick commuters didnt stay long. 

How will this be financed?  Owner carry I presume?  Sounds interesting @Chris Mcmahan ! 

[Chris Mcmahan]

Good points.  I do have concerns about finding contractors.  Apparently theres a go to guy already there on the property that does a lot of that stuff but you never know if/when he will be leaving.  I have thought about building a shophouse on the back of the property but I also plan to be gone much of the time so would need systems in place for maintanence and groundskeeping.  But with a mobile home park (all tenant owned homes)  i cant imagine many maintanence surprises if the well and septic are in good condition....

Yes it would probably have to be owner financing...  hes open to it

[Christopher Pray]

@Chris Mcmahan

What are the expenses, purchase price, and financing terms?