How I determine if a Mobile Home Park is a good deal

[Logan M.]

Currently, I am going through due diligence for a new community. This community has 10 POHs, 4 TOHs, and 2 vacant spaces. There are a few major factors that I consider when looking into a deal-making sense.

Let me first start by telling you why I believe this is a good deal then I will go into my deal killers.

Why this deal works:

1. 0% down seller financed

2. Instant cash flow

3. Rents 20-30% low

4. Loan is amortized over 20 years with a 10-year balloon.

5. Recent infrastructure investment.

6. Great location

7. Plan to sell all POHs, seller financing, or cash sales. Ten homes worth about $50,000 each, all of the homes are occupied.

What would be a deal-killer:

1. Incorrect information from the sellers.

2. Poor condition of infrastructure especially since they have a septic system with a leech field.

3. Problems with the city.
4. Major damage before closing.

Don't overcomplicate this process but make sure you are thorough.

[Roger D Jones]

Quote from @Mel Adams:

If the POHs are in subpar condition but occupied, would you fix them up a little and sell at a higher value, or leave as is and sell for what they’re worth in the current condition? 

 Just gotta do the math... but you also should include the lost space rent cost while rehabing and the mental/emotional torture going through the process of rehabing a mobile home.  Just make sure however you sell it is to an owner occupied and not to a mobile home flipper who will pull the home, resell and relocate.  Rip off the bandaid and get them sold as quickly as possible... 5 easy pennies over a slow nickle.