Driving to look at a small mobile home park for sale

[Michael Fortier]

I went and looked at a 15 space MHP yesterday that was about 45 minutes away from me in a town of about 22k people. The ad said it had 15 sites 6 of them park owned and 70% full. As I drove down the short road that had homes on both side at least 5 of them were vacant (I could tell because they had boarded up the windows) and most of them were in pretty rough shape so its hard to tell if some of the others were vacant as well. I would guess its maybe 50% full. There were dead trees throughout the park. Across the street on two side was an auto salvage yard. It looked like it just wasn't cared for. The park was listed at 150K with lots rents of 175 for TOH and 350 for POHs. By calculators I have seen others use (lot rent  X 12 X #lots X .5 /.1 it comes up at 84K. I certainly wouldn't pay anywhere near asking price for this, but would anyone think it was worth anything to try to turn it around?

[Paul Stout]

Smaller parks can be tough.  Economy of scale.  I would say it is worth it if the market is starving for economical housing.  Look at best places.net to get some income and home prices in the area.  Also look at the unemployment rate and average rents.  If the home prices are below $80k then the low range homes are in the mobile home price range and it may be hard to compete with.  If the average rent is below about $650 the same applies.  You also want to know if there are a lot of land/home deals available in the area.  Those are bad.  The population is a little low.  The market drives the deal.  If you can get it tied up on contract for a price you feel is reasonable run some test ads.  If you don't get a few calls a day the demand is not there.  Make sure you have a contingency in your contract to cancel within your due dilligence period for any reason and you get your earnest money back.  It sounds like some of the homes may cost you money to remove aside from bringing new homes in.  It can cost over $5000 to move a home so be sure to factor that in.