Minimum # of units for MHP?

[Pearce G.]

What do you recommend as a minimum number of units for a first investment in MHPs assuming you intend to use a property manager?

My inclination is to start small to keep my mistakes small.  I've seen some that are 5-10 pads, but is that enough to spread out my expenses and generate positive cash flow?

[Ken Rishel]

Originally posted by @Pearce G.:

What do you recommend as a minimum number of units for a first investment in MHPs assuming you intend to use a property manager?

My inclination is to start small to keep my mistakes small.  I've seen some that are 5-10 pads, but is that enough to spread out my expenses and generate positive cash flow?

 The key to your question is you intend to use a property manager. That leads to the following questions:

• Who is going to sell homes in the community to replace the attrition?
• Who is going to handle property repairs?
• Who is going to handle build outs of new spaces if that is even possible?
• Who is going to be responsible for accepting lot payments and who is responsible for collections?
• Is there going to be any kind of seller finance utilized?

Different answers to those questions will get you a different answer. If you are going to have a community manager responsible for all of the above - except seller finance, you are going to need an absolute minimum of 100 occupied and paying spaces for it to make any sense, and I would be more comfortable at 150 spaces.

If all they are going to do is accept rent payments and act as a face for you with residents and a conduit of information to you, 20 spaces would work.