Can you turn over title for 1/1 mobile home from park to tenant?

[John Lee]

I recently found a mobile home park with good cash flow. Actual number provided below. The mobile home park is located in the city so there is barely any space between them (great for lack of landscaping maintenance, but high noise level and friction between tenant). Since each mobile home is just 1 bed, 1bath, is it more difficult to turn ownership over to tenant?  Asking price $830k, 29 lots with 9 apartments and 4 cottages, 85% occupant rate . The operating expense seem high. How difficult is it to find a good on site property manager? since it is a relatively small park, can i get by with part time property manager? This is my first time dipping into the mobile home park space. Should i seek out partner in capital as well as operational?

$400-$650 per unit

Annual	Annual
Gross Rental Income	$211,116
Other Income	$51,638
Vacancy Loss	$31,500
Effective Gross Income	$231,254
Taxes	$11,058
Operating Expenses	$128,772
Total Expenses	$139,830
Net Operating Income	$91,424

[Rachel H.]

@John Lee It will depend on the tenants if they are willing to own the mobile homes. With owning comes more responsibility and expenses (insurance and taxes will need to be paid). Though if you do give tenants ownership of the homes, it could get sticky if they do not pay you lot rent. Good luck! 

[Bill F.]

@John Lee

Greetings fellow ENC MHP investor!

For a small park with lots of POH the OpEx seems right on or a bit low at 66%. 

You can just give the homes to the tenants, but you run the risk of having a bunch of owners who got something for nothing and act accordingly in addition to what @Rachel H. mentioned. 

Having a full time PM for a park that small is not feasible. Either you'll have to self manage or pay a tenant to act as the onsite management while you run the back of the house operations. 

The numbers you gave a good, but they include POH income, which can overstate the value of the asset. Do you know what the market lot rent in the area is? Also, the "other income" making up 20% of your gross is a red flag. Where does it come from? Late fees, storage rental? 

To figure out a true value, you'd have to break the asset up into its three parts, the MHP, the MH Rental business, and the apartment/cottage rental business.