Mobile Home Park for First (sort of) Investment

[Joe Waters]

I've recently jumped back into BP, upgraded to Pro - and am actively involved in the 90 Day Challenge. This is my 'Restart' at RE investing. I started 20 years ago with a duplex and a single - but sold everything due to a divorce. I've always been intrigued with real estate and knew I'd get back into it at some point. I've operated my own business for the past 15+ years, so I've been busy with that, and haven't really thought about real estate until recently.

I've very interested in MHP investing. I've actually gone through MHU with Frank Rolfe and Dave Reynolds - and will be going through the course again soon. I plan to attend one of their boot camps in the future as well. I've learned a lot from them - and am confident this is the direction I want to ultimately go in.

I've also really enjoyed listing the the BP podcasts with Jefferson Lilly.

My initial thought was that I'd complete MHU and jump right into the MHP niche. However, after getting back into BP - and listening to Brandon talk about RE Stacking, etc - I'm wondering if I should start small and work my way up to a MHP.

So, I'm hoping to get feedback from people who operate MHPs - and if they'd suggest starting out with this niche, if that's where I want to ultimately be. Or is it wiser to start small and work my way up to it.

Jump right into it - or start small and ease my way into it?

[Frank Rolfe]

Joe,

Mobile home parks come in many shapes and sizes, and there are properties as small as 10 lots out there (although I would recommend you shoot for 20+ lots) in a huge variety of price points. I have purchased parks as low as $65,000 with $5,000 down and seller carry for 17 lots and Dave has bought parks for as little as $50,000 before. The mobile home park business is not all about big deals, but the overall goal is to find deals that will be worth $500,000 and up AFTER you complete the project (that's the start of the sweet spot for bank debt). A perfect first deal would be around 20 lots with 10 occupied, master-metered water and sewer and lot rents at $200 per month for $120,000 (a 10% cap rate) with seller financing. You then fill the other 10 lots, raise the lot rent $100 per month over a few years, sub-meter the water and sewer and it's worth $500,000 at a 10% cap rate.

On the down payment, you would shoot for somewhere between $0 and $24,000 -- which would be contingent on seller bonding as well as how poorly the park shows and how much work it needs.

A park like that would be found in the Great Plains, Midwest or Southeast regions.

Hope that gives you some initial direction.