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Mobile Home Park Thoughts
Hey everyone, I wanted to get some thoughts this from you guys. I usually just buy mobile / manufactured home and either fix and flip or use as buy and holds. I came across a lead today on a lady that was looking to sell a couple homes so we got to talking and it turns out she owns a 18 unit MHP in a small town an hour away from me. As it turns out she is either wanting to sell the homes out and then sell the land or sell the park as a whole. Said she owned it since the early 80's and is just tired of it and she is no getting any younger. It got me thinking about the park but I am not sure what questions to ask or what look for. Not sure on the details yet but below is what I know so far.
Small town under 5K people
18 spaces with 3 empty's
Of the 15 occupied spaces the owner owns maybe 8-9 of the homes themselves
Of the homes they own, most are 70's I think with in the 80's and one 2000.
She mentioned that she is selling some of the others on payments to the tenants
There is a metal maintenance building on the property as well.
Lot rents are $200
Park has city water and sewer with shut offs for each home. I am thinking it is master metered. I think new lines were done in the late 80's
I am thinking the water, sewer, garbage is in the park rent. Not 100% Need to ask.
Owner is open to owner finance but not sure on the terms maybe under 8% but I think they are looking for a big down payment. $50k-75K No idea on any other terms.
I need to get more info obviously. I was mainly talking to her in regards to the homes she was going to sell but then got to talking about the park. What kind of CAP rates do parks usually have? What kind of value is it worth? Does land value come into play or is it all jus CAP rate and NOI for the value? Ideas? Thoughts? Questions to find out?
Sorry this post is kind of vague. I really appreciate any info anyone can give.
Most Popular Reply
Try listening to the BP podcast about exactly this. I listened to podcast #111 with Jefferson Lilly. Very interesting stuff. He talks about cap rates and actual park finance/management. Also check out podcast #75. I have not listened to that one.
Good luck!
https://www.biggerpockets.com/renewsblog/2015/02/26/bp-podcast-111-unique-profitable-real-estate-niche-youve-never-considered-with-jefferson-lilly/
https://www.biggerpockets.com/renewsblog/2014/06/19/bp-podcast-075-fedro-mobile-home-investing/