How to Wholesale a Mobile Home Park!!

[Tony Ardison]

Hello all,

I have a highly motivated seller who owns a mobile home park. Can possibly be my very first wholesale deal. Already have a buyer that’s interested if I can get it under contract.

But I have NO CLUE where to start. Don't know how to figure out an ARV or anything since there are no comps. Any suggestions??

I was told that it’s totally different than wholesaling homes in that I may not need a title company and that it is more of a commercial wholesaling deal. I really don’t want to leave money on the table.

Any advice would be greatly appreciated!

[Geordy Rostad]

@Tony Ardison

The value of a mobile home park hinges entirely on the net operating income. If the repairs can raise that income level, then you'll be golden.

What sort of repairs do you propose? How is your buyer going to add value to the park and how much will it cost him to do so? You can't just go in a MHP in boot everyone out and refill it later. That doesn't work too well.

Here's a big pitfall for you though and something you need to find out first...  How many of the homes are owned by the park? Ideally, you need to have NONE of the homes owned by the park. you could own them in a separate company or you could sell them on contracts to all of the people renting in the park but the MHP shouldn't own more than a very small fraction of the homes.

The homes are personal property and thus can't be rolled into the commercial loan. You need to separate the value of space rent from the value of renting the mobile itself. Base your purchase value on the space rent only income.

Selling the homes will decrease the income but will increase the ability to obtain a loan.

Another way to add value is by filling empty spaces.

Where/what is the park? How many spaces? Doublewides or singlewides? Self-managed or onsite manager? RV spaces or is it a pure MHP? Sewer or septic? Average age of the homes? Average current space rent? How many park-owned mobiles?

These are all the questions you need answered just to get started.

You should also speak with a commercial lender about the property. Find a local credit union who has a branch close to the park and discuss what it would take to finance it, any issues, what the value might be, and how to increase the value. Not all commercial lenders necessarily do MHPs do it might take a few tries.