Mobile Home Park

[Jocelyn Hinz]

I am looking at a potential mobile home park purchase and would love some input on the deal. It has 18 lots sitting on about 3 acres of a 19 acre parcel. Lot rents are $325/month, currently 17 are filled. The sale would come with the vacant mobile. The asking price is $435,000. 

I'm thinking we could sell off 10-15 acres of land, it is a fairly desirable area and the land wouldn't feel right on top of the park as it is wooded and hilly. There's also the possibility to add a few units. Currently on a septic that can't be expanded, though sewer should be coming, and it's on city water. Owner is saying expenses are about $10,000 per year. No owner financing, so I'm not sure how we would finance it, but I think we could make something work. It's definitely not pretty, mostly older single wides and stuff everywhere! There's also a 3 bay garage for storage that could provide some extra income, it's very near to a lake.

Thank you!

[Jefferson Lilly]

Don't touch that deal.  Don't buy MHPs unless they are on city water and city sewer.  There is simply no way to know if the private utilities are working - no matter who you ask at the government, no matter what any 'expert' says.  It is impossible to do adequate due diligence on private utilities.  

Additionally, a deal like this (on city water/sewer) would only be worth about $330k, tops.

Plus the seller is a pathological liar if he/she says their expenses are just $10,000 annually. 

There are just too many red flags here (including your inexperience) for this to be the right first MHP deal for you.

Attend F&D's bootcamp (www.mobilehomeuniversity.com), get educated.  MHPs have too many intricacies to 'just take a flyer on one.'

Good luck,

-jl-