Mobile Park Purchase Need advise!

[Gisela Pallares]

Hi everyone,

I am new to BP blog but have been an investor for 2 years now. I have been focusing on buy and hold, mainly do multifamily and residential and so far its been going well but as I was looking for another multifamily, a family friend of ours (my fiance and I) mentioned he would be interested in selling his mobile home park with currently 8 mobile homes and yet room for 11 more. Now he is looking for about 350k and just from research ive been doing from comparables it seems like a decent price but it will need MAJOR renovations starting from paving the entire park, landscaping,tree removal, and some of the homes are in very poor condition that we will need to basically just get rid of. Not counting remodeling that we will need to do to make the rest of the place look decent and attract the right tenants. Our goal in the long run is to slowly offer a rent to own and at one point just worry about collecting the space rent.  Besides obtianing lease agreements, financial statements, Rental history, etc. Is there any advise of what additional info i should request from the seller? Also, for this loan I would most likely need a commercial loan is there any type of financing I am able to get for the renovations such as a line of credit from a bank? 

[Jared Rogers]

@Gisela Pallares two other key components too research are the utility bills and the zoning. Get actual copies of the utilities (water and sewer).  Electric should be limited to community lights etc. On zoning you need to know that the park is zoned correctly and what are the local ordinances you have to adhere to for adding homes to your park. These can be very cumbersome. Also make sure to inspect thoroughly any park owned homes as the repairs add up fast.  

Commercial loans should allow for renovations if it adds value (like adding more homes to the property or facilitating the ability to increase rents). However given the price and depending on the rents you may have a tough time since it would appear that the property does not cash flow very well going in.