Mobile Home Parks Due Diligence

[Todd Hoffman]

Anyone with experience purchasing Mobile Home Parks able to give me some advise on things to ask or look for in the due diligence phase?  What metrics should I use to determine if it is a good deal?  Thanks in advance.   Todd

[Ed Emmons]

If you are planning on making a living or becoming financially independent, it will come much faster owning the homes. In my area a rent will bring $400 - $500 more per unit than just lot rent. As an example, 30 lots with no park owned homes. 30 x 275 = $8250 per month. 30 x 725  = $21750 per month, $13500 difference. One full time guy can handle 30 with occasional outside help. Even with $50000 labor  and $50000 in repairs per year. Own homes $161000 net , pads only , $99000. From our experience in our area, labor and repairs is closer to $50;000 so the difference is over $100,000 per year. From my experience, the extra effort to oversee one person pays a lot. You could also outsource it if you wanted nothing to do with it. Another consideration is the difference in park value based on cap rate. Granted some don’t want owned homes but many of us do.

As @Ryan Groene said it depends on your business plan.