Developing a Mobile Home Park

[Joseph Sangimino]

Hear me out! I've read the articles and forum posts on developing mobile homes parks and understand why they aren't economical in this day and age, how most townships won't work with you, how the demographics don't work in areas where it's economical, etc... and I agree!  

However...

I've run into an unusual circumstance and can't help but evaluate the idea of mobile home park development scenario. I'm looking for input and feedback from commercial investors/developers/operators as to why this is a bad idea - or maybe how it could be feasible.  I understand that for most mobile home park investors, the value is in the easy (or relatively easy) upside potential of improving the operations of a community. Development is a lot more work and risk compared to this contrarian model and simply isn't worth the effort even if it is feasible. 

Here's a general overview:

• 130 acres of land split between two parcels
  • previously operated as a golf course until the owner passed away; it has since been shut down
  • already has a septic system for the club house/restaurant that has been maintenanced regularly (not sure how many homes it could sustain)
  • land was evaluated by a developer, but was written off due to a lack of public water/sewage
  • township told me (not in writing) that public sewage and water will likely go in within 5 years
  • the land is aesthetically pleasing with rolling hills (slight grade) and a few ponds
• Owners
  • well off financially; want to sell but are in no hurry; they are considering a few options
  • willing to work out flexible terms: owner finance, lease, lease option
  • require that in the event of a lease or payment delayed owner finance situation, that the taxes are covered
• Location
  • 2 minute ride to the highway
  • 11 minute drive to a Walmart Supercenter
  • $93,000 median home sale price
  • one hour outside a major metro
  • 6.2% unemployment rate

Startup Capital Required: 

• Property taxes through-out development of first phase of MHs until income producing; then split profit, begin payments, etc
• Engineering plans for 50 homes (expandable to 200 based on demand)
  • surveys, environmental assessments, permitting
  • designed to eventually tie-in to public water and sewage
• Construction of lots, roads, and foundations
• Purchase of new homes to be sold off

I believe there is a significant demand for a family friendly park, retirement community, or both. 

It would require a lot of capital to start, but still only a fraction of what would be expected if trying to develop a parcel with less negotiable landowners. 

Could this work?