Mobile Home Park Buy and Hold

[Julian Ruiz]

Investment Info:

Mobile home buy & hold investment.

Purchase price: $1,100,000
Cash invested: $200,000

Mobile home park purchased at an auction. Buy and hold purchased in 2006. Stable cash flow. Looking to infill approximately 15 vacant spaces with either new or used homes.

What made you interested in investing in this type of deal?

Learned of MHPs from a friend who's father owned a small California park. Jumped in and purchased an Arizona park. We made every mistake possible and learned a lot.

How did you find this deal and how did you negotiate it?

Purchased at an auction. After finding out about the auction, we ran a lot of calculations on the info provided by the auctioneer company but finalizing the deal was very challenging and stressful. We found incomplete information, inflated occupancy and inflated size / available lots.

How did you finance this deal?

Traditional commercial loan. Down payment form HELOC.

How did you add value to the deal?

Replaced water lines in first 18 mos., sub-metered water, small rent raise, adjusted pass through sewer fees to align with actual costs, park clean up, street lighting.

Lessons learned? Challenges?

Finding financing as a mom and pop, out of state owner is difficult and expensive. Also finding property management company who understand mhp's is challenging.

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

We struggled to find professionals in the Reading, PA area who could help. We did work with a very good attorney - Nicole Plank- who understands real estate well. We still use her today. We are currently looking for someone who can help us bring new and used mobile homes into the park and manage the process.