Mobile Home Park Underwriting/ Insurance?

[Luke Tetreault]

Hey guys, I'm currently underwriting my first mobile home park. The sellers have said "we don't pay any insurance due to it being an LLC." Is that a common thing with mobile home parks? I've just never heard of it and could really throw my expenses off if that were to be wrong. Thanks.

[Benjamin Aaker]

Don't fall for it. The fact it is in an LLC has nothing to do with hazard insurance and the LLC gives no protections there. Get a couple quotes from insurance brokers. They can usually give you a ballpark number if you give a few details about the MHP. You'll have no way of estimating this without this piece.

[Jordan Moorhead]

That is incorrect. You need insurance and you may need liability, workers comp and hazard depending on the situation. Best to check with an insurance agent that specializes in MHP like Mobile Insurance

[Luke Tetreault]

Quote from @Benjamin Aaker:

Don't fall for it. The fact it is in an LLC has nothing to do with hazard insurance and the LLC gives no protections there. Get a couple quotes from insurance brokers. They can usually give you a ballpark number if you give a few details about the MHP. You'll have no way of estimating this without this piece.

Thank you Benjamin, I assumed this was false information. 

[Luke Tetreault]

Quote from @Jordan Moorhead:

That is incorrect. You need insurance and you may need liability, workers comp and hazard depending on the situation. Best to check with an insurance agent that specializes in MHP like Mobile Insurance

Thanks Jordan, I will go this route.

[Logan M.]

I have smaller parks but I pay around 2500/park for just liability, not including any coverage on homes.

[Samuel Coronado]

If they are lying about this, imagine what else you will find. I just bought a park where a few shower drains were not even fully connected to the main drain and pouring water in the crawlspace. Be very aware of these people. If they are wholesalers, I would ask around and detail their comments and name drop who said it. This helps flush out the bad apples from the local group. Document every interaction. 

[Andrew Keel]

Quote from @Luke Tetreault:

Hey guys, I'm currently underwriting my first mobile home park. The sellers have said "we don't pay any insurance due to it being an LLC." Is that a common thing with mobile home parks? I've just never heard of it and could really throw my expenses off if that were to be wrong. Thanks.

Hey Luke,

We set up all of our MHPs under their own LLC and we always get an array of insurance for each of our parks. There's a few types of insurance policies that you should look at getting including: general liability, property coverage for buildings and loss of income. I recommend you consult with insurance brokers (like Mobile Insurance/ Kurt Kelley) and try to get 3 different competitive quotes for each type of insurance you need, from there you should be able to choose the most cost effective solution for you and budget that in your underwriting. This is likely a mom & pop taking a HUGE RISK by not being insured.

Goodluck,