Mobile Home Park Purchase - I'd appreciate more critical eyes

[Steven J.]

Greetings all,

I've nearly got under contract my first mobile home park in central Illinois and I feel at a good price - where I'm unsure is some of the projected expenses that aren't necessarily accounted for or broken down by the current owner. I.E. telephone and advertising costs haven't been accounted for and all the management, payroll, and all types of repairs and improvements are lumped as one sum. 

I've prepared a break down of what the projected expenses would be.

Any input would be widely appreciated! Where this deal shines is that lot rents are about $75 below market and the park has some vacancies, both pads and homes, that once filled up will bump this NOI higher.

If you see expenditures I'm missing, or seem unrealistic let me know! Be my extra set of eyes.

Thank you!

[George Skidis]

We manage a park in Southwest Illinois.

1. Check your county to see if there are any mobile home dealerships left. If there are none, where will you find the homes to finish your park?

2. You will end up buying the rest of the homes if in a depressed area. Tenants and toilets oh my!

3. you can spend a little more on maintenance since mobile homes are subject to personal property tax not real estate tax. That saves $1,000.00 a year or more versus Single family homes RE Taxes depending on which county they are located in.

3. How old is the park infrastructure? Have you inspected the meter bases. Are the power line poles propped up? Figure $6,700 per four pads to convert and upgrade to underground supply lines.

4. How old and what type of water lines are there? If owned by the utility not a big deal. If you own them it can add up. 1960's polyvinyl or butyl  is about to reach terminal velocity. Allow $2,500 per lot when the time comes to rip them and and start over. Have a lot of trees, figure a repair per year due to root damage.

5. How many Masonite sided homes? If not sealed and cared for the seems leak and rot your exterior stud walls beyond repair.

6. How many steel sided homes? These are your least problematic.

7. Liability Insurance? Contact Shelter Insurance. Mark Wojick 

Good Luck and Good Investing