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Updated about 7 years ago on . Most recent reply

User Stats

48
Posts
13
Votes
Jamin Olds
  • Investor
  • South Haven, MI
13
Votes |
48
Posts

Looking for advice - Mobile Home Parks

Jamin Olds
  • Investor
  • South Haven, MI
Posted

Hey BP!

I am looking for some advice in regards to purchasing mobile home parks.  For a few years I have wanted to purchase a mobile home park (I have a friend that owns one and he makes  $$$$$) but have felt I did not know enough.  After many hours of research and listening to the latest BP podcast I fell that I am ready for the challenge.

I have found the following parks for sale in my area............

$750,000

59 Lots, 44 Occupied @ $265-315, 15 vacant lots

Monthly income approximately $12,550

Annual income approximately $150,600

$900,00

30 Lot @ $225, 8 Vacant Lots

5 rental homes @ an average of $500

Monthly income approximately $9,250

Annual Water/Sewer Income approximately $30,000

Annual income approximately $141,000

Any advice on these properties? How do the numbers look? What should be a concern?  etc.

Thanks in advance!

Most Popular Reply

User Stats

13
Posts
20
Votes
Richard Allen
  • Acworth, GA
20
Votes |
13
Posts
Richard Allen
  • Acworth, GA
Replied

The 59 lot park looks like it might be a decent price, but you need to find out what the expenses are, and if the water/sewer/trash is billed back to the tenants.

The 30 lot park looks suspicious because you wrote "water/sewer income". You can't expect to make a profit from water and sewer, so I wouldn't use that in the valuation.

You should base your valuation only on occupied lots at current lot rent, then you can add in the value of park owned homes and site built homes.

Mobile homes aren't worth much, so don't over value any park owned homes. Don't put too much weight on being able to fill the vacant lots either. It's possible, but could turn out to be harder than you expected.

As the previous post mentioned, you also should research the area and associated metro to be sure that median home prices are well above mobile home prices, two and three bedroom apartment rents are well above what the park charges, there is a good size population, the housing vacancy rates in the area are no more than the national average, the household income is decent, and the unemployment rate is around the national average or less.

Having a Wal-Mart within 5-10 miles is a good indication the area can support the park.

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