Park vs. Resident Owned Mobile Homes

[Kamran Javadi]

I'm currently looking at a 74-unit MH park in the South-east that is selling for 1.4M. I have just visited it and the park is very well kept, clean, safe, and in a good location with ample low-income jobs around. The previous owners have had the park for 14 years and are looking to retire, thus want to sell. The issue I'm having is that 65 of the units are park owned. I know the dogma seems to be to own parks with resident own mobile homes. This park is cash flowing approximately 11k/month, the owners have an onsite resident who acts as the manager (collects rents, shows units for rent, communicates with owners daily) and also does most of the day-to-day maintenance. They compensate this guys with a 50k/year package that includes free rent, salary, bonuses, etc.

When I asked the owners why so many units are park owned they told me they can make much more money this way. Doing a quick run of the numbers it doesn't look like they would fair much worse off if all the units were resident own, especially when considering the time spent running such a park.

I have two questions:

1) If I purchased this park and left it as is (ie majority park owned) what's the big deal with hiring an PM company to run it? How is this different than buying a 70-unit apartment building and hiring a PM company to run that? In my case, I figured I can replace the current property manager (tenant) and use that extra cash to hire a decent PM company to provide near full-service so I wouldn't be involved with day-to-day operations. Worth noting, I will not be local and cannot keep my eyes on the property at all times.

2) If I decided to take the park in the other direction with the plan of "renting to own" these homes, doing this for 65 units would take years. Would this even be worth it?

This would be my first RE investment. I am looking for a deal where I can be largely hands off and do not need to physically be at the property to run it. I would appreciate any thoughts or criticism. Thank you.