Convince me NOT to invest in a MHP

[Nathan Barshinger]

I'm trying to find good reasons not to invest in MHPs. If 25% or less of the homes are park owned and there is cash flow, what are some valid reasons why I would not want to invest in a deal like that besides being in a market where I don't have a big enough pool of people to fill the remaining homes?

[Frank Rolfe]

Do not buy a mobile home parks that has:

1) No operating permit as evidenced by a Certificate of Zoning.

2) No demand as verified by running test advertisements.

3) Failing private utilities unless you have an approved plan to fix them and can afford to do so.

4) Dirt roads unless you have a lender that will finance it, or the capital budgeted to pave them.

5) One individual (other than the park owner) that owns a huge number of the homes (most lenders will not make a loan if one person owns more than 5% of the homes).

6) Does not have a clean Phase I environmental assessment.

7) Does not have a clean survey.

8) Does not have a clean title.

9) Is overpriced in such a manner that you will not make money with it based on reasonable performance.

10) Does not have a healthy risk/reward relationship (buy low risk with high reward and avoid high risk with low reward).