Charlotte, NC · Member since 2014 · 14 posts · 2 votes
I have an opportunity to invest in a 25 lot mobile home park with public infrastructure in a good area at a very attractive price. The owner is a motivated seller who wants to retire and move out of the area, so I was able to negotiate some favorable terms. My issue is that he owns most of the MHs on the lots and leases them to residents. Given that I live over an hour away from the project, I was hoping to hold on to the lots and avoid becoming a landlord that has to deal with the day to day of leasing MHs. I am considering selling the trailers to the residents, but as parks are my main investment focus, I do not have a dealer's license to handle all of the transactions. Does anyone know if it would be legal to sell them in bulk without a dealer's license, or would I need to obtain one in order to make the deal work?
Specialist · Houston, TX · Member since 2012 · 579 posts · 301 votes
11y
Why not just partner with a local dealer to assist? I did a similar transaction and the dealer - who I knew through my local investors association - did the paperwork for $200 each. There are other ways to sell the homes but it depends on the EXACT rules in your state. John Fedro is someone who might be able to consult with you on this topic as well.
Lancaster, PA · Member since 2014 · 1 post · 0 votes
11y
To be honest, if you have a chance at a 25 unit mobile home park at a favorable price from a motivated seller, then by all means hop on it and make it work. Have fun!
Specialist · Houston, TX · Member since 2012 · 579 posts · 301 votes
11y
Why not just partner with a local dealer to assist? I did a similar transaction and the dealer - who I knew through my local investors association - did the paperwork for $200 each. There are other ways to sell the homes but it depends on the EXACT rules in your state. John Fedro is someone who might be able to consult with you on this topic as well.
Having a park with all (assuming) park owned homes makes it a long road ahead for you on trying to get the tenants converted to home owners. Just be sure you are buying the park good enough to compensate for that journey. If you want to post the numbers maybe that would be helpful in making the determination.
Cary, NC · Member since 2014 · 38 posts · 30 votes
11y
Matt, it might also be possible to sell the park owned homes (POH) to investors. If the current POH rental rates are below market, investigate remodeling them as they become vacant from tenants moving out. Once remodeled, they could command a higher rental rate thus supporting a handsome sale price to an investor.
Investor · Jackson, GA · Member since 2011 · 228 posts · 126 votes
11y
I'd check with the state MH Association about selling them for cash, cheap. You may not need a license. I don't mind POH's, but if you don't, and if you're buying the park based on lot rental income only, then that would be the route I'd take.
Charlotte, NC · Member since 2014 · 14 posts · 2 votes
11y
Thanks so much for the feedback! We will definitely look into these suggestions. While the deal should go off very well based off of the rental income on the lots alone, I'm hoping that we can get some of our capital out quickly through the sale of the MHs. I will look into working with a dealer for individual sales and the local MH Association about a quick portfolio sale.
Investor · West Monroe, LA · Member since 2015 · 15 posts · 9 votes
11y
Make sure you're not paying for the mobiles and their income. Most mom and pops want you to pay for this "income" in the sales price. You should buy on a multiple that makes financial sense on the lot rent income only not including the mobile rents. The extra money from that rent will only go into upkeep and headaches especially for a long distance landlord.
Investor · West Monroe, LA · Member since 2015 · 15 posts · 9 votes
11y
Make sure you're not paying for the mobiles and their income. Most mom and pops want you to pay for this "income" in the sales price. You should buy on a multiple that makes financial sense on the lot rent income only not including the mobile rents. The extra money from that rent will only go into upkeep and headaches especially for a long distance landlord.