Analyzing MHP Deal in Midwest

[Kendra Levy]

Hello! 

I was contacted by a wholesaler with a MHP for sale in the Midwest.

It has 6 homes, fully occupied, all take up less than one acre.

The mobile homes and the lots are owned by the park.

Gross monthly income is $2,070/month

Owner pays:

-Trash is $64/ month

-Water is $200/month

-Tax is $25/month

Tenants pay their own utilities, electricity and gas

Selling because it has a lot of equity in it

$84,000 with option of seller financing

Rent ranges from $275 through $575/month

Owner charges a lady who has lived on the park for 7 years the lowest rent of $275/month

City sewage and city water

Any and all advice on this deal would be greatly appreciated. I feel it would be a good way to get my feet wet since it is a very small park. However, since the homes aren't owned by the tenants, I am hesitant.

[Ryan Groene]

These parks can work...but the only way they can with this low of lot rent is if you have partner who literally lives within an hour drive of this park or you have another park that is larger within 20-30 min drive of this park and you can have a manager look over this park as well.

Or if you live in that area....

Smaller parks are great for getting experience but can be really hard to sell on the exit strategy becuase the time it takes to run this park....your better off with park thats about 25 spaces....6 spaces in the midwest is really hard to do...unless lot rents are apart 500 a month or so...because of the % per space is the same and your downside exposure if someone moves out is a lot greater % of your income vs a park that is larger.

hope this helps