Mobile home parks with owner owned mobile homes

[Monica Ponton]

I came across a mobile home park for sale on bigger pockets deals. In effort to learn as I go, my question is whether investing in a park where you own all the trailers is a risky business? Or is it an investment in the land more than the park? What is the difference in doing this kind of deal over a park where the trailers are not owned by the park owner? 

[Mario Dattilo]

You want to own the land and the tenants to own the homes. This keeps you maintenance costs down, labor costs down, and makes the property marketable to investors who understand the industry. Lenders want to lend on real property and mobile homes are chattel (personal property like a car) making park owned homes something lenders are not attracted to. So financing becomes much harder with a high percentage of POHs. When valuing a park with POHs just calculate the income that would come from the lot rent portion. Then if you have to put a value on the homes use a number that you could fire sale the home for to make sure you didn’t overpay. Hope this helps.