Investment Info:
Large multi-family (5+ units) buy & hold investment.
Purchase price: $300,000
Cash invested: $40,000
I became aware of a mobile home park that was for sale by owner. I started calling other mobile home parks nearby, to get an idea of comparables. I called the park owner of Shady Acres Mobile Home and RV Park and asked about rental rates. During our conversation, I asked if they might be interested in selling the park. They commented that they were indeed interested in selling the park. My heart skipped a beat with excitement when I heard this. I asked if they would consider seller financing on the property and they said, “yes”. By now I was screaming inside with elation. Was this real? This was an off-market property, with income opportunities, and with seller financing!
Later that day, I approached my husband about this park called Shady Acres. I told him we should buy this park as an investment property. He said, “We don’t know how to run a mobile home/RV park, we’ve never done something like that before. It’s not just an investment, it’s a business.” I said, “I know, you are right, but this could be a good deal and we will figure it out as we go.”
With the sellers, we agreed upon a down payment, a purchase price, a monthly payment with no interest, and a 10 year term loan with a balloon payment due at the end. We purchased the park in October 2021. We have worked on improving the physical appearance and infrastructure of the park, updating the homes, getting a new sign, advertising it online, and creating a website (www.shadyacreshuntington.com). At this point, we are three years in, and have learned that you sometimes have to have thick skin (grit) in dealing with tenants, managers, and RV site visitors; while maintaining a sense of humor and humility. We are excited about the future potential of this investment.
What made you interested in investing in this type of deal?
The opportunity to receive cash flow from mobile home rentals, RV site hook ups and houses.
How did you find this deal and how did you negotiate it?
I became aware of a mobile home park that was for sale by owner. I started calling other mobile home parks nearby, to get an idea of comparables. I called the park owner of Shady Acres Mobile Home and RV Park and asked about rental rates. During our conversation, I asked if they might be interested in selling the park. They commented that they were indeed interested in selling the park. My heart skipped a beat with excitement when I heard this. They said "yes" to seller financing.
How did you finance this deal?
Seller Financing over a 10 year period with a balloon at the end and a downpayment of $40,000.
How did you add value to the deal?
New signage, added gravel to the park, updated some of the homes, fixed electrical breakers for RV hook up sites, created a website and advertise online.
What was the outcome?
Things are going well! We are enjoying the park and the income continues to increase, as we improve the park.
Lessons learned? Challenges?
Our biggest challenge in the beginning was our on-site manager. He was Mr Drama. After a year and a half of him creating unnecessary issues, we decided it was time to find a new manager. The new one has been fantastic and made things so much easier!
Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?
I found this deal on my own.
