Multi family or MH development?

[Max Toler]

I purchased a 2 acre tract of land right off of the interstate in a small town in Louisiana. It currently has 1 4plex building that rents for 700 per month per unit. They are 800 sq ft and 30 years old. My intentions for purchasing this property was expansion with more units. I have already been approved for 16 additional 2 Br 2 BA apt units. This build will require water line extension to my lot (currently a well) and a sewer treatment plant. After crunching my numbers with my banker, I have decided to step back and look at possibly doing a small mobile home park with new trailers and pads. But I'm still waiting on approval of the mobile homes because of the strict zoning laws here on parks. My analysis is leading me to believe that the MH will provide double the monthly income of the apartment because of the debt service being less than half of the new apartment build. New apartment rents will be in the $900 per month range and a 3 Br MH will rent for the same with a fraction of the investment. Any advice on short and long term strategies for both. I really need to maximize my monthly income now, not in 10 years. Any advice would be greatly appreciated.

[Belinda Lopez]

Your biggest limitation with MHs will be the septic rules for the area and state.  Did you already check on exactly how many MHs per acre they will allow.  Not sure about LA but in Texas the state will only allow 1 new septic tank per acre while local counties allow 7 MHs per acre so unless there is muni sewer or you have enough land to build a commercial septic system it's just not economical to build MHParks.

Also if your plan is to rent the MHs the maintenance can be really high compared to apartments.  It's a different type of tenant than apts.  If you are doing lot rent only (which is more recommended) then your liability and other costs will be much lower.

Have you looked at maybe building an RV Park instead?  Run your numbers and see what they are telling you.  Good luck.