Mobile Home Park Valuation

[Account Closed]

Found a 38 lot park that has been totally run down. Basically 0 income. 38 lots with water and sewer. All the homes will need to be removed and the roads re-scraped. My idea is to buy new mobile homes a few at a time, get them rented, buy a few more etc etc, How do I evaluate what the lots are worth without any income?

[Jay Hinrichs]

Originally posted by @Bill F.:

@Jay Hinrichs yep and the fact that there are no financing options for large scale MH purchases like OP wants to do. Clayton has there CASH program, but its still kinda small and not super user friendly.

My buddy worked at a large RE PE shop and they had picked up 4,000 or so pads as part of a few NPL bundles from banks. They had to clean out the deadwood, get rid of the meth trailers and then infill; standard fare.

He calls up a few manufactures and is looking to get a long term contract to buy like 100 homes for a few of their parks. He finds one he likes but is told they don't do that he'd have to order each individually, when they were ready they needed half down, they'd deliver, and the balance was due in 15 days. He agrees, has his intern sit down for like two days doing the 100 individual orders and all is good once once he has the invoice numbers to his accounting dept. Up until one day he gets an angry call saying 'you haven't paid us for that MH we delivered we are stopping all your orders'. He apologizes and asks how far past due and the balance. 17 days (which is really 2 days since there terms are 15 days past deliver) and they owe $60k. My buddy is shocked. He works for a multi billion dollar hedge fund that operates thousands of pads, but they are going to spike the orders of 2 days and $60k... That is the industry I guess.

I think there is a nice little business to be had supplying just park owners with homes at scale and financing them in a more attractive way.

well one way maybe you set it up like the airlines..  their are monsters leasing companies that actually own the jets and the airlines lease them from them.