I'm just getting started in real estate investing and there is a mobile home park for sale in my town. It appears to be a property that someone has just flipped. It is a 7 unit park with an asking price of $395,000 that has been on Zillow for 21 days. Any advice would be helpful.
Just look at the return that you would make and let that drive your investing decision. We just put a 4 unit park under contract yesterday, but it is in GREAT condition and the rents are about 100 below market value per trailer. That gives us a lot of room to increase NOI and increase the value of the park in the long run. The size of the park is just a scale matter. Most people don't invest in a park unless its 10 units or greater, but there is money to be made in small parks, especially if they are out in the country a little ways. A lot of people don't want a huge park to live in. They want a sense of community but also a yard in the country. Like i said, if the numbers work then it may be a good thing. If not, i'd keep driving. In my experience i've seen higher returns with some of the small properties because they are owned by mom and pop and have a lot of room for new systems and processes.
Like @Ryan Groene said, we will need a little more information. It's all about the numbers. I'm going to guess that it is all Park Owned homes though unless this is in a major city with $600+ lot rents.
So after further investigation the property has been on the market for 2 years. The owner has spent a lot of time turning it into vacation rentals and has pretty steady bookings. With a conservative 40% occupation the cash flow is about $1200 per month and the cash on cash roi is nearly 20%. The owner has it listed for $395000 Zillow estimates its value at $322000 so I figured I would shoot for a compromise of $350000. This is what the above numbers are based on. The main sticking point is that I will need some sort of creative financing to get the down payment.