Mobile Home Park Retirement Income?

[Robert Burns]

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

[Dale Osborn]

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.