All Forum Posts by: Jeff Flynn

Not necessarily hard times, but more commonly life events. It is usually a tenant moving to a new area, because of a new job and they just want to be done with their trailer.

I have had the disgruntled situation come up when I stopped using the on-site maintenance man and made him pay full lot rent like every one else.  I’ve found that when a tenant is upset with the park or the owner, they don’t respond to the legal process at all. However, they do respond to an interested buyer for their home. I had a case where I was weeks away from the sheriff actually evicting a seriously stubborn tenant, and an interested buyer for the home actually went to the home and worked with the current tenant to have them leave so they could move in. 

I think you're right about an ejectment being more burdensome.  I am also in Alabama and have had this situation come up a few times. I have started the process for both but have never had to fully execute either. What I have found to be the quickest and most cost effective way to solve the situation is actually to buy the home from the tenant then turn around and sell it.  This works best on used homes where the price is only a few thousand dollars, but if it is a brand new home worth tens of thousands you could offer to help them sell it. You'll add more value to your park by selling the home for an incredibly low price but having the new tenant agree to a higher lot rent. The best part is this whole process will take usually only a few weeks and you won't need to pay and lawyers.  

MHPs can make for fantastic investments.  There are a ton of Mom & Pop owners that are free and clear on their parks.  That creates a great opportunity to get seller financing on your first deal which is especially important now with rates where they are. 

When you say it is a 12% cap rate, does that include the rent collected from renting the mobile homes themselves? When banks (and MHP investors) look at the value of a mobile home park, they will not count the income generated from the mobile homes themselves as mobile homes are considered personal property.  I have done a few all POH deals and I can tell you they are not only a night mare to finance, but they are a night mare to manage as well. 

Another thing to consider is that you may have a difficult time trying to find a buyer for that property down the line.  Most people looking at MHPs want 20 lots or more so you could end up getting stuck with this park for good. The homes selves also tend to depreciate and not appreciate so you could find yourself overpaying. 

If you get a well to supply water, you may take on liability if a tenant were to get sick from the water.  That is why most MHP operators stay away from wells if they can.  If it is the only option, you may be able to find a company that will take on that liability and service the well to ensure it is safe. 

As far as septic goes, I think it gets a bad reputation but I honestly prefer it over city sewer.  Although the city sewer itself is pretty hassle free, it comes with being in a city and cities tend to be difficult to work with if you are running a mobile home or tiny home park.  

Typicaly the amount of septic you need is going to be determined by the bathrooms in the units you are connect to them.  A 2 bathroom mobile home would need a larger system than a 1 bathroom mobile home.   If you are going to be using tiny homes, you may be able to use one large tank with enough field lines for 2 tiny homes. Doing it that way would only be a tad bit cheaper than a separate tank for each home.  At least that is how it is around me.