Mobile Home Parks questions

[Micahel Lorent]

Looking online, it seems almost too good to be true of an investment.

Let's say this home:

http://www.mobilehomeparkstore.com/p4sale/sonora-tx-116.htm

116 spaces for $995,000. If I put $200,000 down and get an $800,000 loan at 6% across 20 years, the calculator puts my monthly payment at $5731.

If I had full occupancy at $250 rent, that's $29,000 gross scheduled rent per month. Subtract the monthly loan payment and it's $23,269. Let's say an additional $5,000-$8,000 for maintenance and misc. fees, and you're looking at cash flow of $15,000-$18,000 per month from a $200,000 investment. Is it too good to be true? With that sort of investment into apartment buildings or SFH's, it wouldn't be even $1,000 monthly cash flow.

Plus the parks would be low-maintenance and fairly simple to maintain, as compared to apartments which would be more of a hassle.

Any thoughts?

Also, what if someone wanted to develop a park? How much would the cost be? If I purchased 25 acres, how many spots could I place on it? And how much would the infrastructure, permits, etc, cost?

Also in order to get full occupancy, I could try things like 6 months free rent w/ 5 year contract, as well as improving the premises and maybe adding something like a tennis court or recreational area.

And here are two ideas of mine:
Could someone get electric generators and sell electricity to the tenants? That way I capitalize on rent and electric.

Would I make more money selling off each space? I could offer the tenant a financing plan across 10 years at $450/month in order for them to purchase the land underneath the home; if they like it, then I'd make a nice profit. And if they are unable to pay, well, they can't really trash the land the same way they can trash an apartment or mobile home itself.

[Dale Osborn]

I read somewhere that you can retire on the income from just one mobile home park. Also, most owners who get into MHPs are not satisfied with just one so they look for more. Got burnt out on apts so did a 1031x into a MHP in NC. Built up occupancy of the MHP by increasing it from 82-108 occupied spaces. Raised the rent by $15 twice and after 4-years left NC with $1M more in money to roll into another 1031x for another MHP in another state. After 4 years there will probably be ready to sell that one and look for a larger more expensive MHP to get into. Compared to apts the management is a breeze - you just rent the land. Turnover is next to nothing. For older apts it is a rule of thumb you have to put 55-65% of your gross income back into the property to maintain it. With a MHP the rule of thumb is 30-40% of gross income goes back in so leaves you with more! Then you buy and sell (Lonnie Deal) used mobile homes in the MHP and you have another stream of income coming in. Sometimes realtors refer to a property like this as being a cash cow - I tend to agree with that statement.