Looking for advice from out of state mobile home park owner

[Yany Rivera]

Hi everyone,

I'm looking for some advice from mobile home park owners that are out of state owners. I'm considering purchasing some parks that I have found that are located in another state. I live in Washington and they are located in Missouri/Illinois. These parks are in mixed conditions and some require work and some need to be filled with renters to get in the black. I understand these issues and the time commitment that each bring to the table. I would like to get feedback to see what I have not thought about before committing to this investment.

I would like to know what is the biggest challenge besides the distance? 

If you had to do it over, what would you change?

What is something unexpected that you have learned from being an out of state mobile home park owner?

Thanks everyone! I look forward to your help.

Sincerely,

Yany Rivera

[Account Closed]

Your biggest challenge will be during the turn-around process.  You need to get through this phase as quickly as possible.  What I mean by this is the deferred maintenance part, not the infill part.  If there are capital items that need addressed, do it immediately.  Here are some challenges I've had being out of state.  Some of these would be a challenge either way though:

1. Turn-arounds require you to visit frequently (evictions, oversight, new manager training, etc.)

2. Sometimes the city is difficult to work with.  i.e. They tell you to come in and take care of some particular issue.  They don't allow you to email docs to them.  They don't allow you to fax docs to them. etc.  Expect certain tasks having to deal with the city to be similar to what it must have been like doing business before the internet age.  If your manager is half-way decent, he/she can help bridge this gap.

3. You will need to develop good systems for collections.  When you take over Mom & Pop run parks, tenants sometimes have an adjustment period to how they report issues and pay the rent.  This will usually work itself out in the first three months if you are firm on your new policies.

4. Your manager will need to be able to use a computer and a smart phone.  (or have a family member who knows how)

5. Use a call forwarding system (like Grasshopper) for your park phone.  This is helpful so that you can take calls that the manager misses.  You can also monitor the phone system to ensure they are doing their job.

I prefer owning out-of-state or out of the area.  We like to invest wherever we can find the best investment so we aren't sacrificing returns for the sake of being able to drive past the property every day.  I also think the distance does you a favor.  It forces you to set-up your systems in a way that makes the investment more passive and your overall business more scalable.  

The biggest takeaway is that you need to realize that you'll be at those properties every other week or so until they're stabilized.  The faster you can get them stabilized, the quicker you can get them on a once every 6 months/once every year visit schedule.  Our most recent acquisition in November is now on that schedule and I spend about 6-8 hours per month doing the books and overseeing it.  However, I was there 3 times the first month we owned it.  My partner had to fly out there twice the month after.