All Forum Posts by: Ryan Groene

in terms of the area? or the property itself?

mobile home parks are just like any other form of real estate when it comes to evictions and looking for properties.  it is based on locations....which is the schools, the city, the area, the crime rate., etc.  

good resource to start is bestplaces.net----look on their with the individual cities and make sure median home price is over 100k or around that. looking for this because the tenants of mobile home parks can't afford a stick built house, so you need a big spread in order for the park to work becuase it is a desirable area to live, and their only option is the park, so therefore you have a potential endless stream of tenants.

go around and drive every park in your city/area your looking to invest in.  not sure how long you have been looking or driving thru them, but until you start looking at them all the time, to the untrained eye they can all look trashy or bad, based on stigmas....or in this case all of them could be trashy and in bad areas.  

you can run adds and that you will move their home for free and free lot rent for a couple months as well. most of the time you have to find the older homes yourself and bring them in. and then either sell them on the RTO/rent credit, or as handyman specials. or you just rent them out and charge a higher amount than the RTO/rent credit to incentivize them into owning. also bringing in new homes thru CASH program will allow for quicker infill.

it all comes down the zoning and what laws the mobile home park was under when it was established. most parks are legal non conforming...which is grandfathering.   they park was established at a time and then abides by those laws when it was established.  most cities try to throw this at uneducated park owners because they want to shutdown all the parks in their town.  as @billf states, this is true that jefferson has some good stuff on this and their is a good amount of case law.

it could be that zoning does state this exact thing. check your laws and what the zoning code is.

also, if the fire marshall determines that the homes are too close and violate the fire code, that is a different story and you may have an issue putting in homes becuase the lots are to small.  

also, check set backs for the homes as this can be an issue with older lots and newer homes that are too big.

@Alex Hake...are you specifically referencing the Oregon market?  @John Fedro is a great place/resource on how to evaluate a mobile home and how to rent them how and evaluate them.  good amount of articles on BP forum as well written by him.   

Evaluating a mobile is different than a single family home in that some of your percentages of cost to repair will be different...most of my experience is in the midwest where mobile homes cost in 1k-40k range. 

hopefully it isn't that hard to do. but it also depends on the makeup of the tenants.  and sometime it is easier said than done depending on the market.  Don't underestimate the operations of the treatment plant....

it is not a lagoon right?  

quick evaluation...40*175*12*.6/10=$504,000...this is number of occupied lots*current lot rent*12(to annualize)*60% or .6(40% operating expense because park pays water and sewer and higher because private sewer) divide all that by 10(which assumes a 10% cap rate)= purchase price.  Then you can add in the value of all the park owned homes, which is 27*$5k to $10k=$135,000 to $270,000.  total purchase price could in the range of 635k to 774k.  Not necessarily that far off. 

I would assume a pretty high expense ratio, probably closer to 50% becuase of the high amount of park owned homes.  iF they are willing to finance, it probably wouldn't' be a bad deal.

Just keep in mind that the sewage treatment plant, also know as waste water treatment plant does cost more to run, depending on the state, also if it goes out, it could cost close to 500k to replace depending on the type of plant.  

@Joseph Sangimino....I would say your initial cost to develop 50 lots is a little low.  im guessing your looking at around 20-25k per lot for developing, which is around 1mm-1.2mm  if you develop 50 lots.  the development cost per pad includes running water/sewer and streets.  This doesn't include bringing in the homes yet, which is another 25k to 40k*50 lots=1.2mm to 2mm.  All in development cost on the low end is 2mm or so. Then on top of this you have the purchase price of the land...

 The reason i say you have to bring in the homes is because even if there is demand, most tenants won't bring in their own homes because they can't afford it.  so you either have to move them in yourself or buy new homes/use the CASH program with clayton(if this works in your area).  You won't be making any money until you get everything developed and homes in there, which is probably another year or so.  

you should be able to figure that out based on the filing for the property records. Co-ops are good to sell to but not to own because they could control rent and other strict things. They work like an hoa and condo association 

The questions isn't whether this is a bad idea or not, its a question of whether if it is worth it for the capital that would be required and if you couldn't use that capital for better returns in other investments sooner and not go through as much headache with the development of MHP.  

I would be looking more for MHP's that are already established with potential room for development in adding spaces...all of the big REITS are doing that a lot more frequently to keep pushing potential for growth and addition of spaces.  

As you have already stated, this is more than likely a bad idea, unless the stigma of parks change here soon..then development will be a lot more attractive for a lot of investors and this would be a potentially good opportunity.  as this current situation stands, it seems like its a little far from a metro to attract enough people to bring in homes/move into new singlewides that will cost 25k and up. Also you will be on private water/sewer for the foreseeable future so that makes it less attractive in the exit plan of the development.  unless it was public water/sewer and the city was going to pay for it; it makes it very hard to develop a park based on the economics of it.  If you think you can do it and make a good return, then go for it.