Mobile home park key due diligence factors?

[Michael J Scanlon]

I’m looking at a 31 unit with double the open land to expand. The deal seems too good to be true so I’m wondering what I should do differently for a mobile home park in terms of due diligence?

Do I calculate my numbers different to a typical buy and hold?

Are there special factors within mobile home parks that I should be aware of that would make it a bad investment?

Thanks!

[John Jacobus]

A few key things to consider are below. Please also consider reaching out to @Ian Tudor and Ryan Narus from Archimedes Group.  They have an excellent due diligence checklist that helped us augment our acquisition process.

-> Zoning:  Make sure your land is zoned for MH and that expanding the lots on the new land will not threaten the zoning status.

-> Infrastructure: Watch out for lagoons and waste water treatment plants in small parks.  We walk away from those.  If the water and sewer are supported by well and septic, respectively, make sure you have them inspected by licensed operators.  Ensuring that water and sewer infrastructure is in working order and not subject to major deferred maintenance is critical for small parks.

-> Demand: Make sure there is demand for the new lots but running test ads at the pro-forma rental rates.  You’re looking for 7-10 inquiries per week.