All Forum Posts by: Mario Dattilo

Unless the park owned homes are worth a lot then you don’t want to pay $600k. Your expenses on something this small will be about 50% as well. 

Only include lot rent in the income. Don’t include the home rent portion to the income. Instead value the homes for what you can sell them quickly as is. Valuing home income will have you overpaying for the property. Check out some MHP investor tools in my profile. Hope this helps! 

Facebook marketplace

Craigslist

Mhvillage

Zillow

In the world of development you have money at risk to complete these and other reports, legal, zoning, permitting, environmentals, etc before you go hard on your deposit with a seller. You can spend hundreds of thousands on large developments that you never buy. Development is a big risk and a big reward business. 

You should always have a due diligence period that would allow for enough time to complete all 3rd party reports and govt approvals before you have your earnest money go hard. 

In due diligence we measure all lots. We typically need a min of 10’ between structures to meet code but the more space the better. The more dense your property the more parking and home replacement becomes a problem. 

I would not invest in CA. I also would focus on buying existing MHPs and improving their existing cash flow instead of developing new. See the thread that just started a few days ago called “is it worth developing vacant land for MHP to sell” to read why. No need to re-explain. 

I would develop something else other than a MHP on that land. Look at RV or a get a feasibility study to tell you what the highest and best use is for the land. If I want to buy a MHP I would buy existing. Maybe just sell the land and roll that money into an existing park. Development is a riskier business than buying existing cash flow. if you’re not an experienced developer and For your first mobile home park I’d recommend keeping it simple and doing a deal you know will be profitable. 

Quote from @Nikki Long:

Mario ,Thx for replying .

It’s a package deal . 4 park and 1 stoorage units . Didn’t mention any utilities and who pay them . Looks like the seller is paying it . I attached some number they shared with me . They ask 2 million and owner finance 

At a glance it looks pretty high at $2mm. You’re under a million for the mobile home portion. I didn’t spend the time to calculate out the single families storage etc. with the limited info you’re conservatively at about $750k for the Mh portion assuming very little value on the homes.

Then just total up your other revenue and to be safe figure 50% expenses not knowing the lease types and what’s all going on there. Storage could be as low as 35-40% expenses. You will definitely want to offer less than ask. This seems to be a bit of a cluster with the different uses. I would break out each use and value them with separate expenses to them. Those expenses in the P&L are vague and missing things. 

Hope this helps. 

@Nikki Long go ahead and tell how many occupied lots, how many are park owned homes vs lot rent, what the lot rent is, what type of water/sewer systems, and whether the park or tenants pay the W/S. Ask price too. 

With that basic data I can tell you if you’re within range. Also check out my profile, I have a bunch of resources for MHP investors. 

Mel sounds like you’re on the right track. Yes test ads are good. You can just use a pic of another home and not a factory stock photo.

All sounds good except I would caution you on buying a park with only 3 occupied lots. You’re going to be negative on cash flow likely for a while and buying, bringing in, setting up and selling is a great way to create a ton of value but it is capital intense and time consuming. Most people underestimate that process. It creates the most value but is also the hardest to do. 

I alway recommend new investors find a light value add deal that has in place cash flow and a clear path to stabilization with maybe some infill but not heavily weighted on it.

Doing a very heavy lift for your first deal is riskier but also holds you up from doing more deals as it will take you years to fill that up which will take a lot of your time that could be focused on more deals. Not saying you shouldnt buy it but consider the value of your time and your goals and see if taking on a heavy lift gets you there. 

My profile has some great resources for MHP investors. Hope this was helpful. Good luck with it.