All Forum Posts by: Nick Jansen

There is vacant land adjacent to the park that is for sale. I can't imagine anything that would be a good investment unless it was simply more lots but I'm fearful I lack the skills and funds needed for that. Development seems like a lot to bite off on my first deal. I'm always open for suggestions though.

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@Jack Martin

Since my last post I found out the owner has another lot that has an abandoned trailer on it that she will be including as part of this deal. So 10 occupied and the 11th has a vacant trailer on it. I'm not sure how to factor that in. It's a short term negative because of the added expense to get rid of but it adds another spot to collect lot rent.

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@Brenden Mitchum

I'm sure I'm being naive but can you be more specific on what expenses I'm missing when it is all lot rent and city utilities?

Seller financing isn't an option.

I've talked with a local bank about the loan and they didn't seem to have a problem with it. He said get it under contract, and call him back to start the paperwork.

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@Brenden Mitchum

I'm going to try to address your questions in order the best I can...

Monthly Cash Flow after Water/Trash/Mowing/Taxes/Insurance (I'm assuming you mean insurance is $50/lot/year when doing lot rent?)/Mortgage= ~$785/month.

Cash on Cash assuming 25% down and $2500 closing costs= 23.5%

My plan is bank financing... I didn't realize the financing would be an issue.

I have no plans to sell any time soon. I want as passive as possible buy and hold real estate with long term cash flow. I wouldn't mind owner finance if I had to when selling to spread out the tax hit.

Please keep the questions coming. I appreciate your reply and help!

Nick

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I'm looking at a 10 unit mobile home park. All lots are currently full and paying $250 lot rent. All mobiles are old single wides.

Owner pays water bill of $200-250 monthly. City water and sewer not sub-metered

Garbage is $120

Lawn care is free lot rent for one renter...$250

Taxes are $11 per month

Insurance... What is reasonable??

Asking price is 225,000 but she is motivated.

I figured 250 x 10 x 60 = $150,000

or 250 x 10 x 12 x .6 ÷ .10 = $180,000

This would be my first investment real estate so please help me. I like the lot rent only aspect and I can manage myself due to location. Negatives include the age of the homes and that I called another park and they are charging $175, the mow, pay water, and have an open lot .

I plan to offer 150,000 but am curious how high to be willing to go. Any other issues it questions please fire them at me.

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Originally posted by @Jack Martin:

@Nick Jansen I would echo what's been said above, particularly if this is your first park.

With that said, this is a park that will require high demand if you plan to stabilize the park through home sales. You will definitely want to perform a demand study as part of your due diligence (and it's a great education as well).

Anytime you will be filling vacant spaces or selling POHs, the most important task to perform prior to acquiring a park is a thorough market demand study. DEMAND is the foundation of your pro forma, so don't shortcut the process. It is not that difficult if you are willing to take the time and are diligent.

Here are the simple steps to uncover the reality about demand:

Start with the apartments in the area. Call them and ask how much a 2 bedroom apartment is. It should be at least double the lot rent at a mobile home park in the same neighborhood. Then ask how many vacant units there are to choose from. If you find that the apartments have a low vacancy, that is a good sign. If you find high vacancy, that is another red flag for the market and you should be cautious. You should always consider apartments as an option for your prospective tenant, because if it costs them more to make payments on the mobile home plus pay the lot rent, they might just rent an apartment instead. Most people might miss this little nugget, but it is a quick way to determine the lack of demand and where lot rent should be in the market.

Next, call the parks within 5-10 miles that are similar parks. Ask them what their current lot rent is and what else is included/excluded? Ask if they have any rentals in the park and how much those rent for. Ask them if they have any homes for sale in the park and what the details are, and how many homes have sold recently. Do they finance? How much do they require down? What kind of credit do they require? Ask them if there are any vacant spaces in the park and what incentives would they offer if you brought your own home into the park. From those calls, you will have learned what your competition is related to lot rent, the sale of homes, how many POH they have, and what incentives you may have to offer as you sell homes.

Next, you can advertise a home for sale yourself as a "test ad". Place ads on every platform you can where home buyers could be looking for an inexpensive home. The goal of these test ads are simply to find out how much interest there is in the market for the homes you will be selling once you purchase the park. Make sure to advertise in all the available channels you can find so you can perform a true test. (craigslist, FSBO, zillow, etc. as well as placing signs on the street corners in the area) You should be receiving a high volume of calls (I like to see 20 calls a week) if you expect to fill a high amount of vacancy at a park. Any less than that could be another red flag.

Take the time to do this right and you will be glad you did. If you get positive signs from all those efforts, then it's possible the previous owner was simply neglecting the park and you could have a good opportunity on your hands. Remember, filling vacant spaces and selling POHs is all about market demand. Make sure it is there or you'll end up wishing you had never bought the park.

All the best,

Jack

Thank you for the reply Jack! That all is great advice and makes sense but if I advertise a trailer house for sale when when I don't own one, what do I do with the calls etc. that come in?

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I have not owned one but am willing to learn. I just bought Trailer Cash and am reading it.

The residents are paying the city for utilities but I'm not sure if it's septic or sewer.

It is 1 hour from my house.

Thank you for the advice!

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@Paul Moore, I appreciate your response and I will find a copy of Trailer Cash and look into a home study course by Mr. Rolfe. I'll take any additional advice you might have sir.

Thank you!

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I'm looking at a mobile home park that has multiple lease options being used by the current landlord but the numbers seem great.

It has 42 lots total.

32 homes are owned by the park

--10 are occupied for rent between $335 to $655

--8 are on a rent to own contracts for $500 or $550.

--14 are unoccupied and need a total of about $35,000 worth of repairs to be ready to rent.

8 lots are lot rent only for $220/lot.

2 lots are vacant.

26 units pay utilities to the city and the remaining are sub metered but currently paying $45/ mo to the park.

I would need to have park management because it is too far from my home to self manage.

I don't want to own the trailers because of the maintenance costs so I would be trying to get to all lot rent or rent to own unless convinced otherwise.

I'm not sure what else to include so I'll open it up for you to tear me apart.

2 Votes

All Forum Posts by: Nick Jansen

Nick Jansen has started 2 posts and replied 9 times.

Post: 10 unit mobile home park

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Post: Mobile Home Park Purchase

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