Mobile Home Park Retirement Income?

Mobile Home Park Retirement Income?

Wholesaler · Baton Rouge, LA · Member since 2008 · 471 posts · 98 votes

I'm working in a variety of RE Investment areas (wholesaling, rehab/flip & lease options) all of which have erratic income streams. I'm leaving my full time job next week and considering investing in a mobile home park using part of my investment porfolio in that I'm only getting 5 - 10% return on my investments.

I want to establish a $3,000 - $5,000 monthly postive cash flow to supplement my other investments. I need feedback from experienced mobile home park investors in the following areas:

1. Is a mobile home park a good investment for retirement income?
2. If so, how do I find good potential mobile home parks to invest in?
3. How do I evaluate the mobile home park in terms of selling price and return on investment?
4. What is a good cap rate for a mobile home park?
5. I have about $50,000 - $100,000 available as a down payment for a park. What would that relate to in terms of a selling price for a mobile home park?
6. How much annual income should I expect buying a park with $50,000 - $100,000 down?

I live in Baton Rouge, LA and would consider buying a park within 100 miles radius. Does anyone know of any good parks for sale in that area?

Thanks

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Mobile Home Investor · Spanaway, WA · Member since 2008 · 1k+ posts · 578 votes
15y

Robert:

Sounds like you need to get some education under your belt before proceeding further. Good online sources for info are this site, mobilehomeuniversity.com, mhps.com, [REMOVED]. Ray Alcorn has a nice Mobile home park manager book/course available from [REMOVED]. The IREM also publishes a book available for $35 + $4 shipping by Stephen Pappas on how to manage a MHP. One of the above sites has an article entitled - you can retire on the income from 1 MHP. Besides lot rents there is the opportunity of making additional money from buying used MHs in your MHP and then selling them and carrying back a note at 12-15% interest. As for finding MHPs for sale - for a smaller sized MHP which is all your funds will allow you to get into now - drive through the MHPs in your area and if interested - write a letter to the owner to see if will sell. Loopnet.com, mhps.com, marcusmillichap.com, commercialmls.com are all websites that have MHP listings. But again, a small sized MHP may not be there. The forums on the above sites give you numerous ways to evaluate the MHP. Several rules of thumb: Never let your mortgage exceed 50% of your gross income; expenses in a MHP with no rental homes should be between 30-40% of your gross income. Cap rates for MHPs vary depending on if in foreclosure or not. For those selling not under duress - a cap rate of 7-7.5% is the average. Good Luck on your search for a MHP to buy in LA.

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  • Wholesaler · Tucson · Member since 2009 · 4 posts · 1 vote
    15y

    Robert,
    These can be excellent retirement investments!I'm also looking for MHP's in good markets with some owner financing. If you get replies outside of your territory, would you please let me know? Thanks for your consideration.

  • Wholesaler · Baton Rouge, LA · Member since 2008 · 471 posts · 98 votes
    15y

    Donna,

    I will pass on any ideas. I just hope some of the Bigger Pockets folks reply.

  • Mobile Home Investor · Spanaway, WA · Member since 2008 · 1k+ posts · 578 votes
    15y

    Robert:

    Sounds like you need to get some education under your belt before proceeding further. Good online sources for info are this site, mobilehomeuniversity.com, mhps.com, [REMOVED]. Ray Alcorn has a nice Mobile home park manager book/course available from [REMOVED]. The IREM also publishes a book available for $35 + $4 shipping by Stephen Pappas on how to manage a MHP. One of the above sites has an article entitled - you can retire on the income from 1 MHP. Besides lot rents there is the opportunity of making additional money from buying used MHs in your MHP and then selling them and carrying back a note at 12-15% interest. As for finding MHPs for sale - for a smaller sized MHP which is all your funds will allow you to get into now - drive through the MHPs in your area and if interested - write a letter to the owner to see if will sell. Loopnet.com, mhps.com, marcusmillichap.com, commercialmls.com are all websites that have MHP listings. But again, a small sized MHP may not be there. The forums on the above sites give you numerous ways to evaluate the MHP. Several rules of thumb: Never let your mortgage exceed 50% of your gross income; expenses in a MHP with no rental homes should be between 30-40% of your gross income. Cap rates for MHPs vary depending on if in foreclosure or not. For those selling not under duress - a cap rate of 7-7.5% is the average. Good Luck on your search for a MHP to buy in LA.

  • Real Estate Investor · fountain hills, AZ · Member since 2011 · 9 posts · 1 vote
    15y

    Robert

    Check out www.mobilehomeparkstore.com

    They can be great investments. The key is to buy right, no surprise there.

    For passive income (relative term here) buy a park with NO park owned units, city utilities.

    For greater income park owned units make great rentals in the right area.

    Look for pride of income parks rather than pride of ownership parks.

    Buy and flip units in your park as they become available.

    Good Luck

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