Investing in Mobile Home Parks, anyone?

[Sean Ie]

Hey all!
First like to intro myself and say how great this forum is...

Has any of you bought or currently own any mobile home parks? Can you give me any experience details? I've been hearing that they can cash-flow really well. I own acres vacant land south of the Grand Canyon in a tiny town called Valle. There are some mobile home parks around there and it gave me some ideas :idea:

Also have a good friend looking to buys some value added parks and I'm interested in partnering up with her.

Thoughts?

Thanks in advance! :rock:

[Jim Johnson]

Originally posted by Sean Ie:

Hey all!
First like to intro myself and say how great this forum is...

Has any of you bought or currently own any mobile home parks? Can you give me any experience details? I've been hearing that they can cash-flow really well. I own acres vacant land south of the Grand Canyon in a tiny town called Valle. There are some mobile home parks around there and it gave me some ideas :idea:

Also have a good friend looking to buys some value added parks and I'm interested in partnering up with her.

Thoughts?

Thanks in advance! :rock:

Sean,
I am pretty experienced in the area of investing in mobile home parks. I have bought 4, and have another under contract. I buy parks that have upside in some way, pad rent, expenses or mis management issues. So my strategy is great if you understand how to add value, and would be brain damage for a more casual investor looking for a property with stabilized income. Let me post a example:
I bough a park in Southern Colorado which was 40 spaces, $180 for pad rent, the park paid water/sewer/trash. The local market was closer to $250 for pad rent and the local market also was sub metering waster/sewer and charging back for trash. The water/sewer bills were about $45,000 annually. So I bought the property for $450,000. In the first 60 days I put in water meters, hired a on site manager and implemented a pad rent increase to $220 monthly. I had 2 abandon homes which I bonded for title on, had a rehab done and sold on notes. Over the course of the rest of that first year I pulled in two more homes, sold them on payments and had another pad fill from another park in town. At the one year mark I raised pad rent to $240 per month, and now have 39 pads full. I will probably fill the last pad sometime in the next 60 days, and sell the home on payments. The park today is worth about $930,000 on a 11 CAP, which is about right for that part of Colorado. With the last pad full it should settle right at $950,000. It cash flows very well because I eliminated the water/sewer expense, and have bumped pad rents by $60 per pad. So I can keep it and let it cash flow, or sell it and 1031x the $500,000 it has gone up in value...
I hear the question coming, is that kind of return typical? The answer is, it can be depending on what your buying, how well you do your due diligence, how picky you are on the deals you pull the trigger on, how skillfully you manage the parks etc.

I hope this helps...