Mobile Home park fill-in (New vs Old)

[Michael Baradell]

Hey BP!

We are purchasing a mobile home park in a community of about 16,000 people. There are several smaller towns along the outskirts that have a few thousand people in each. The closest large metro are is about 2 hours away. Our park is 55 pads and has 12 active pads. 11 mobile homes and 1 commercial building (Church).

There are 3 nearby parks within a 5 mile radius and all are near capacity. All of these parks, including mine, has all older mobile homes. There are only a handful that are less than 10-15 years old. Most are metal on metal and are not appealing to look at.

Market rent tops out around $550-$600 and lot rents range from $150 (all three surrounding parks) and $190 (my park)

My park has a history of poor management and just recently has started cleaning out the bad tenants. 
My plan is to bring in new mobile homes utilizing the CASH program (we are already approved) to change the look and demographic of the park. My concern is, if we bring in new mobile homes, can the area support the higher prices? My preliminary ads show that there is definitely a need for affordable housing. 

My question is, how can I determine if new houses are the right move or if we should stay par for the course and bring in old homes? 

[Rachel H.]

@Michael Baradell If you're planning to change the look and demographic of the park, then you'll have to target a new market and make sure there's a need and/or want for what you're looking to do. You may want to talk to a few mobile home dealerships to see what the demand is for this new demographic you're looking to work with on selling new homes in your park. 

Also, try comparing the homes in your park to the other ones and determine what homes (i.e. type, age, condition, etc) are selling for and how long it took to fill them. This will give you an idea of the current market and what others are willing to pay. 

If there's not a park around selling new homes and working with a more upscale clientele in your area, it may be a bit risky without the data. 

Hope that helps!