Mobile Home Park Virginia Seeking Guidance

[Zack G.]

I have a piece of land that i own with 50 small individual lots. The property is about 30 minutes from Harrisonburg VA, but definitely outside of the city a bit. The lots are zoned to accept singlewides. There is town water/sewer hookups available for about $10k a lot. There is high speed internet available, and its 4 minutes to the major highway and local supermarkets.

I am trying to evaluate the feasibility/profitability of this project. I know folks warn against starting MHPs, but is a MHP on town/water sewer with high speed internet a different story?

When i do a rough NOI calculation at $425 for lot rent, the project would appear to be worth around $2mil after completion (how long will that take? years presumably?), and my all in would be around 1.5m. I can take that the dev. costs on a per lot basis, which will help, so i dont need to spend $500k upfront the on water sewer hookups. PLus, i can always bulldoze the lots on 30 years and sell them for homesites.

What am i missing? Please help SFH investor with no MHP experience.

[Frank Rolfe]

Before you even consider this deal, run a test ad in the largest metro paper that this park would serve. Put it in the classified section under "Mobile Homes For Rent' and put in that ad:

NAME OF TOWN THIS PARK IS IN. 2 and 3 bedroom mobile homes for sale or rent. From $795 per month -- includes lot rent. Call (XXX) XXX-XXXX.

Have the phone number a Google or Grasshopper disposable number. Run the ad for 10 days. After ten days, count up how many original calls you have (no repeats). If you have 30 or more calls then it might work. If it has 10 to 30 it's possible it might work but probably not, and under 10 forget it.

The $795 price is your lot rent at $425 per month plus the mortgage on a typical single wide at $30,000, reduced by a few dollars to sound better (would normally be $825 total).