Running a 20 space MHP remotely...can it be profitable?

Question

I'm familiar with the northwest Georgia area, and there are some good deals for several MHP within a 150 -mile radius of each other.  Most of these parks own the mobile homes though, so it's certainly not a majority of lot rent only units.

My question - can it be profitable to run smaller MHP from afar (I live in Alabama - about a 3 hour drive)?  I'm not sure how property management works for a MHP.  Bigger MHP generally have an onsite manager, but these wouldn't be big enough for that.  And they are far enough away from each other that I don't think the same property management company could run them all.  And they don't have enough combined income to hire a full-time property manager to run back and forth.

And if it can't be profitable to run these types of MHP remotely, is the only profitable way to run them to manage them yourself by living in that area?

I'm a bit confused, and wonder if I've mentally trapped myself in a box of my self-imagined obstacles, or if I'm trying to see profit somewhere that it isn't.

Any advice would be appreciated.

William Noel · Answer

@Christopher Hall @Jack Baczek

Here is a little trick that we use at our parks. I find it to be very helpful as remote operator.

The rent collection process can create problems. There is temptation to steal, checks "lost in the mail", and a good amount of he said/she said.

As technology becomes wide spread with park residents, I think this issue will sort itself out. In the meantime, here is a low-tech solution that is working very well for us:

• Find the closest bank to your park with decent online banking (we use Key Bank and Prosperity Bank for our parks). 
• Open a deposit only account for each lot in your mobile home park. Yes, this might be a lot of accounts. 
• Make sure these accounts have overdraft protection, no fees at all, and one login to access all the accounts. At Key Bank, this account is called Hassle-Free. 
• Send out a special notice to each resident. Tell them their unique account number and the new deposit details. We also include these details on their monthly statements.
• On the morning of the 6th, go through the accounts, make sure the payments match the statements, and transfer the funds to your main account (this is fun). Issue notices for the accounts with no balance. 
• Remove your rent drop box!

This is working very well for us and has completely eliminated the need for on-site manager to deal with rent or for any checks to be mailed. If anyone else has other ways of doing this I'd love to hear about them! Will

Account Closed · Answer

Yes, absolutely 100% The things you should have are the tenants owning their own home, good systems and processes , a decent lot rent , stabilized , city utilities, some type of boots on the ground (manager or other ) , and a decent to good market (demand wise)

For sure it can be done (with caveats and stipulations ). A property like this has potential to generate 30-50k plus NOI and that's why I never overlook these smaller deals if I can get it at a price that makes sense.

I know with certainty it can be done from 956 miles so I'm sure 3 hours can be achieved :)

William Noel · Answer

We have found it to be pretty hassle free. It's just one of many options out there. Cozy is great, I tried it as well but we do have a lot of residents with no bank account so we use this more simple, less techno-advanced system now.

Daren Jones · Answer

@Christopher Hall Yes, I think you can run a smaller park  remotely. It needs systems and thorough expense monitoring though in my experience.  @William Noel Another suggestion that I currently use is Cozy.co if the tenant has a bank account they offer online payments services for free. You go in and set it up for the tenant, you select what bank account you want the payment to go into, cozy.co sends them an invitation, tenant verifies their bank account (simliar to PayPal) and they can send you one time or reoccuring rent payments. It has been awesome for me.

Account Closed · Answer

@William Noel

Thanks for sharing, its always good to know more options than less :)

Account Closed · Answer

@William Noel    That seems like an awful lot of work and headache, I like to keep banking with minimal relationships .  We put a heavy emphasis for online payments but sometimes the people in parks don't want to or may not have a bank account.

Brian Zoberg · Answer

I use the drop box in front of the managers house.

Then the manager deposits the rent on the bank and faxes a copy of deposit slip and list of who paid, lot #, check/ mo # etc.

The rent box is cemented into the ground and locked

.

John Arendsen · Answer

Not familiar with your neck of the woods but I can tell you from experience that being an owner in absentia can be a challenge unless you have some form of local managements or at least maintenance. 20 spaces is indeed too small for an on site manager, however. So unless you're willing to make that 3 hour drive to change someone's water heater or have a midnight emergency with a senior citizen who's toilet took a dump I'd be looking for an experienced off site management/maintenance company to do your fetchin and carryin. Good luck.

Running a 20 space MHP remotely...can it be profitable?

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