Is a mobile home park with 25 vacant park owned homes good or bad

[Michael Gorence]

I've been trying to analyze mobile home parks. I'm not sure about how to consider a park with a large amount of vacant park owned homes. I realize it would depend on the condition of the homes and vacant homes would probably be in need of rehab. With a park of 90 spaces, 25 rented and 25 vacant homes I have to wonder is this situation an upside or a liability? The broker stated that the park was in this condition do to neglect by the owners. I was hoping for someones opinion on this situation.  

[Jan Kerr]

@Michael Gorence I like mobile home parks. Renters pay for the living space, so they generate nearly as much in rent as a site built home. That sounds like a lot of vacancies, which tells me that poor management is the problem. Verify what the normal vacancy rate is for that area by entering the zip code on BestPlaces.net Use the left column to find "housing stats" to get the info on vacancy rates. Once you know what it should be, then you can investigate the issue as to why this place is not keeping pace with the norm. If there is high demand for rentals in that area, you have a nice opportunity to turn it around with good mangement. Be careful to calculate in all the renovation costs of the vacant units before negotiating a purchase price. Don't be afraid to negotiate hard to get the price down to a number that works for you. Once occupiable, you can shuffle tenants into the renovated ones, if you want to keep those tenants, and renovate the rest of them. Then I agree with John Thedford about selling the homes to tenants, even if you have to carry the contracts to do it. That transfer's the maintenance responsibilities of those individual homes to the buyers, aleviating you of that expense. Do proper screening when agreeing to sell on contract to make sure they will follow through and complete the purchase. Typical banks do not make mortgage loans on mobile homes older than 10 years old, so you may have to carry some contracts to get them sold. Good luck in your research. I'd love to hear how it goes forward.