Been a while! Wheres my trailer park people.

[Kalyb Coats]

I found a trailer park......18 spaces ......14 filled.. 2 houses on the property (not habitable) ...All the trailers are owned by the tenants. The spaces are renting for 200 a piece. Its on city water and sewer. I have to go look at the houses end of the week to see if they are rehab worthy. So thats where im at. 2800 gross per month on whats rented right now.  Whats a good expenses percent average? 

[Bill S.]

@Kalyb Coats so what came of this? Expenses include roadway maintenance assuming the roadways are private. Is it paved or gravel? Is it master metered or individually metered? Who owns the water and sewer infrastructure? Leaking water pipes are expensive to replace and tear up your paving. Water is expensive if it's master metered. Since sewer is also city, finding water and sewer for $20 per month (10% of gross rents) is great. It also means a $280 per month water and sewer bill. You should drill down on the costs. Who mows the lawns? What about common areas? What about snow plowing, who does that? Is there room to raise the lot rent? $200 is cheap for some areas and expensive if you are way out in the sticks. What about competition? Can someone just buy and empty lot in town and make it a trailer park or is the area zoned for them? Do the City fathers hate the place and want to run them out of town or are they ambivalent? What is the history of the park? Are the current tenants out of towners that will move on when the economy dips or are they rooted in the community.

Get a peak at the sellers schedule E of their tax return. See what expenses he reports to the IRS. On any investment you must at some point look at the specific numbers. This one is close enough to begin that discussion.