All Forum Posts by: Paul Stout

One other thing @Tim White Investing in an IRA is not the same as investing outside of an IRA. You will want to make sure you are well educated on the idiosyncrasies of IRA investing or the results can be painful. If the money is already in there then it is a great way to grow your wealth. It's not all free bubble up and rainbow stew (RIP Merle) though? There are some disadvantages depending on your goals and how your assets are currently held.

I think that is a great decision @Tim White   Another website I recommend you spend time on is parkstreetpartners.net 

Looks great.

Please understand that a forum post can never give you enough information to go from zero to hero.  I will give you some info but I highly recommend educating yourself thoroughly on the subject of MHP investment before you jump in.  The first things you need to know is if the utilities are public or private.  If they are private I would recommend just walking away.  A park this small could probably not absorb the worst case scenario on private utilities.  Looking at the income I am guessing that the mobile homes are park owned.  This is bad and if you purchase this park you will want to change that right away.  You will need to know what lot rents in the area go for.  Base your analysis solely on lot rents.  If the place is fairly clean with good tenants and public, direct billed utilities you can figure a 30% expense ratio.  Make an offer based on a 12-13 cap.  If you get it under contract you can verify the expenses and decide if it is right or not.  Make sure you offer states that you can back out for any or no reason during the due diligence phase.  Once its under contract start marketing the empty space on Craigslist immediately.  If you get zero calls in the first week, you probably want to dump the deal.  You can try tweaking your ad before making that decision.  visit mobilhomeuniversity.com and purchase the mobile home park investors study course.  It's worth every penny. 

If you were looking at a multi unit building I would say you are on the right path.  In the case of a trailer park you have to evaluate differently.  What generates the income makes a big difference.  Is this lot rent where the tenants own their homes or is this park owned home rentals?  If it is the former then you are probably on the right track.  If it is the latter then you are going to be way off.  A park this small will trade at a 12-15 cap depending on the utilities.  Mobile home parks are unique animals and cannot be assessed like other multi family assets.

Thank you all for sharing your processes. 

@Tim White I am reading that you have $200,000 cash, is that correct?  If it is I would recommend looking at parks up to $1M.  I would highly recommend using leverage and not limit yourself to these small unattractive parks.  I would recommend looking at parks of 50 pads and over.  Purchase the biggest park in the best market and stay away from private utilities if you can.  They are out there and you will find them if you look.

I have not @Joseph Pike but there is a big event there this weekend and a lot of people I know are going. 

@Tim White Quite a bit of additional information would be required on your deal to be able to ascertain a value but the initial sniff test says that unless this park is in the middle of Beverly Hills California don't walk, run away.  I would then suggest following @Curt Smith suggestion and learn everything you can before considering mobile home parks.  They are not like any other asset class.  Information can be difficult to find and expensive but it is necessary to have before making an offer.  Try mobilehomeuniversity.com. 

Funny  @Joseph Pike I was just looking to see what might be available in your area a couple days ago. I was planning on going to the Knob Creek Range Event this weekend and I figured I might as well look at some parks while I'm down there.  There wasn't anything listed on the usual sites I normally  look at.  You could start checking local papers and even sending letters to or calling the owners near you.