All Forum Posts by: McKenzie Peterson

@McKenzie Peterson I can recommend David Rousher's book "How to Invest in a mobile home park - for business profit and money" in this case.

His chapter 6 "Why not just build a mobile home park?" will give you a complete layout of the challanges and costs related to establishing a new park. In summary, it's not cheap and it's not easily done!

@McKenzie Peterson Check with zoning to see if it's possible. The mobile homes you see around there may be grandfathered in. You'll have to see what the restrictions (if any) are for bringing mobile homes and placing them on that specific property. Good luck!!  

What do you mean by "holding the title with a lien until the loan is satisfied" why would someone do this ? Can you explain some of those strategies to generate revenue from mobile homes.

When you sell someone a traditional piece of real estate they hold the deed to the property. They sign a promissory note with a lending institution and the note is secured the property with a mortgage, thus the property is collateral for the loan. Should the new owner not pay, you have to go through the foreclosure process in order to remove them from the property. With a mobile home that changes. You hold the original title and the lessee gets a copy with an indicated lien holder, which is you if you are financing the home. Thus the process of removing them from the home is much shorter and simpler, much like repossessing a car. This is good, because 9 times out of 10 they wont pay off the note and you will "sell" the home again to the next person on payments with X dollars down.

- How do you calculate lot rent, home rent ?

Sell the monthly payment. Calculate the terms so that the total payment (lot rent + mobile home payment) comes out to be 80 to 90% of what someone could rent and apartment for of the same size/floorplan. 

- And how can you make revenue off utilities ?

Some responded that you can't make money off utilities. In a traditional sense gas and water cannot be marked up such that your tenants are paying more in total than you are charged for the bill. But if you think outside the box a bit to less traditional utilities then its possible. Lets say you have 100 serves of cable in your park. Normally each tenant would pay the cable company $40/mo for cable tv. You negotiate with them to buy the serves in bulk at $20 per and make the spread. If a park has individual propane tanks at each trailer, you can absolutely negotiate a reduced rate for propane and charge back the tenants.

- What are some other ways I can generate revenue from them seems like there are more ?

You have too small of a potential park for some of the ideas above to work. Some others might not make sense either but are big money makers. Coin Laundry, Snow Removal (if your streets are not dedicated back to the county), Lawn Mowing (technically each is responsible for their own lot, but you end up with several heights of grass and random lawnmowers strewn about)

You're idea is great but putting it into fruition can be tough. First, even you own the property/land you will need license/permit from the city before you can put a MH in your land. That land itself has to be zoned for MH and even you got that small piece of land get rezoned for MH, it will cost at least 30k or more each pad to set it up.

Also, its illegal to make money off utilities.

Depends on zoning restrictions. You need to find out if the surrounding mobile homes are grandfathered. You may be seeing 6 homes on each acre but that may have been decades ago.. you need to call county building and development committee.

Developing a park is not feasible especially under 6 units.. grading water and sewer hook ups will eat you alive. Development cost would be shared more efficiently with 50+ units but even that wouldn't be feasible in terms of development equity return.. just not there

It makes more sense to expand on an existing park and buying adjacent land to combine and expand..

I see new mobile homes dropped to you in the Midwest for $46k. 4 bed 2 bath 1100.sqft.. these can rent for $1200 all day in Franklin County. I plan to expand my park and make a small court of these new mobile homes segregated from my other lower end mobile homes.. I can easily hook up my existing private water and sewer lines to accommodate.

Also I don't even have to buy the homes. I can make a pitch out to investors on how they can make $700 net per month on a $46k investment. There expenses are $300 for lot rent $120 for management and $80 for trailer tax, insurance and capex.. tenant pays for utilities and trash...

Do your home work on zoning..

Good luck