Mobile Home Park Development

[Caleb Coblentz]

Hey BP,

I'm itching to get in to the MPH game.  I've looked at a few, run the numbers on a few but haven't pulled the trigger.  The property I looked at today has me thinking.

25.25 total acres 

11 park owned homes on site, 6 park owned homes off site (2 rented, 2 ready to rent.  The current owners lease some adjoining property and have homes on those), 3 park lots ready for homes and 2 additional park owned homes not set up.  The existing homes are in a wide range of condition.  

Average lot rent in our area is $300.  There is a huge need for affordable housing.  Every MHP I spoke to in my research had 100% occupancy

Option 1:

Purchase the entire property.  Develop 14.96 acre chunk in to 44 pads ($968,000-1,056,000 *$22-24K per pad* expense).  Move all the decent POH to the  14 existing lots outside of that tract (potential monthly rent $5,700) to help offset development costs and service the loan.

Option 2:

Only purchase the 14.96 acres for $200k and develop.

I would love to find a park that is already running, not needing any development but that has been hard to do.  I'm talking with an investor on the hard money side.  I don't really want to partner with him but that is an option.  Thoughts?