Commercial Investing Ideas

[Josh Pratt]

Hello everyone, 

I am interested in commercial investing, with mobile homes and RV parks being high on the list.  I have just recently started speaking with a local MHP owner (only one in town) and seems like he is willing for me to bring in mobile homes (pay him land rent) and rent them out to tenants.   This seems like a great way for me to get my feet wet without diving all in at first.   There are a couple of vacant pads at this park.  It's in a decent area.   Anyone out there currently doing that?  I do understand that I will have to manage these units.  Lot rent is $155.  

My initial thoughts were to do a small development of about 7 pads myself.  I know of some commercial land within city limits, but I'm not sure the number are going to add up there.  What are the general costs to set up a spot?  I generally like the idea of buying and then owner financing homes while also collecting the land rent.  

I have also spoken with a local RV park owner about potentially buying his park.  Price is 225K.  It is 12 spots and a small house.   This is NOT a destination park, and primarily has long-term, month by month rental agreements.  RV parks generally scare me a little more because everyone could back up in one day and roll out of town.  Another local RV park actually buys RVs and rents them out on a monthly basis.  

Thoughts?

[Mark Rickert]

Hi Josh,

Complete your own diligence on the financial model, demographic model, and physical model of the park, and your idea.  You are placing a lot of your investment control in the hands of a current park owner.  If he/she has a park on the downstroke, where nobody wants to live you are stuck with homes with no renters.  Also, do you want to be in the rental business or the park business?  High risk for low returns.  Just my humble opinion.  

Look to buy a park with upside and low levels of park owned homes in a growth area.  A class C park you can build equity in.  Purchase from a Mom and Pop.  25 spaces or higher.  No wells, no septics.

Good luck

Mark Rickert