All Forum Posts by: James Dickens

Seen it a few times but I don't have first-hand experience. Basically, you have to put the homes in a separate LLC. You can sell the MHP entity and still retain the homes as a Lonnie Dealer paying lot rent to the new park owner. This setup will chase some potential buyers away because they may not want Lonnie Dealers in their park however there are others who won't care especially if you owner finance the park sale as well. That way you maintain some of the income from the homes as well as payments for the park.

@Carl Dieckmann I'm not an MHP owner but I am an underwriter for a nationwide broker and have seen a few of these come across my desk in recent weeks and at least one has been in Texas.

Here are some questions that come to mind. 

Are you planning on filling spots like an RV park where owners bring in their own RVs or are you planning on purchasing and placing and renting them like a Park Owned Home? I would assume the latter but want to be clear. I have seen where owners split out the ownership to a separate LLC for the home and operate them almost like a lonny dealer and the park LLC only shows pad value.

Are you going to change/modify the hookups on the pads for RV's

Do you plan on exiting out of the RV's and replace with MH at some point and if so do you think you will be able to recoup the cost of the RV (again depending on if you will be buying and placing). POH-type rental on an RV will take a toll quickly. Also, repairs will be more costly because of the special nature of it being an RV. 

If you have a mix of units on exit how are you going to market that? MH/RV mix parks usually don't show well. 

Also know that with RV's your electricity will be expensive compared to MH. If you plan to have long-term direct billed that's one thing but if you will be doing month to month or less you will want to have a system in place to recapture that cost. 

Would it be an option to move it to 100% RV's? 

I would be concerned that the option of quick short-term cash/growth will be outweighed by the headaches you will have over the long run and at exit. Just my 2 cents here. 

@Emily Thompson If you want to turn the Mobile Home yourself it would most likely work best if you put filp deal in place before you make your purchase. That way you can pay for the deal and then get paid the same day. You should be able to set up the closing to do it all at once. It will take some planning but can be done. 

As far as having an income property you are correct, if you sell the mobile home then until you put something back on it you have cash for the sale of the Mobile Home and an empty lot. So if you are buying the lot to make money and not for your personal use here are some other suggestions.

1. Keep the home on the land and rent it. Of course, this one has been covered already and some good suggestions have been made on how to go about that. 

2. Keep the home on the land and Air B&B it. If it's on the Lake and it's a nice place then make it into a vacation destination. This could also lead to better ROI if you want to do the extra work or pay someone to manage it for you (less ROI but still an option).

3. Take the $ from the sale of the Mobile Home and put another building on the property. Home, duplex, tiny home, a few RV's (if the community lets you use this option), Shipping Containers, or purpose-built storage units. or put gravel down and fence it and use it as an open but fenced RV/Boat storage area. 

4. Flip the land for a profit. It may be that the land will be worth more without the mobile home on it (Some people can't see past the mobile home issue so they don't value the land as much).

5. If it has water access build a dock and rent dock spaces to people who don't have direct water access. 

If I think of any more I will let you know :D

James

Here is another option. If they/you have title to the home (will be separate from the land and will list the VIN #) and you don't want to deal with it, look for parks in the area that are looking to fill lots. If the home is in decent shape and can be moved it should have a value of at least 18K (again dependant on condition). Right now new homes are still taking 6+ months for orders to be filled so used stock is in high demand. If the current owner can't/won't sell it, maybe you can find a buyer and sell it at closing much like a flip. 

A spin on that option is to look for a park that may be accepting homes into it. You may even find one willing to pay a moving fee or part of it. Have the home moved to the park, you pay the lot rent, rent the home out and collect rent above lot rent.

You end up with a lake lot that is mobile home free and you make some money as well. 

Just trying to think outside the box a bit :)

Never installed one on a mobile home but had one in an office where I worked. The unit itself worked well for temperature control. At about the 4 year mark it developed a leak that came out through the vent at the bottom. I believe they removed it after trying to fix it a few times (after my office was moved to another part of the building) 

@Tanya M. Tucker if you have any questions in the future please reach out. Always happy to help. 

@Tanya M. Tucker for the most part what @Brenden Mitchum is telling you is correct. Some caveats though are if you own other rental property in the area a small MHP could work or if you plan on buying another MHP in the area it may also work. The biggest thing you have to consider is your exit and unless you can make this a really nice small park or group it with other assets as part of a package it will be hard to exit any time soon. 

This park will be right for someone but is that someone you? I look at MHP every day so if you are still considering it and want a second set of eyes to look over the numbers I would be happy to help you out.  

And that is why @Frank Rolfe is a master :) Nice breakdown!

With limited information, it sounds like it has potential. Have you run a test add to see if you have any interest in the vacancies? Have you run the numbers on the park itself to determine what you should pay? Have you looked to see if this fits what you want out of an investment? 

I wouldn't count it out as you may have found a diamond in the rough but I would get someone involved that knows a bit more about MHPs. There are some guys on here that would go over the deal with you and walk you through some of the pros and cons. Maybe some of the Mobile Home Park guys will see this and give you some solid advice on how to assess. I would, but all of my information at this point is theory and not fact as I'm looking for my first deal.