I would suggest looking for a park over 100 lots in the South. The amount of repos in Florida, Texas, etc… are huge.
If you find a 100 lot or more park that has 25% vacancy with lot rents far below the market average. If the park is over 100 lots then it can afford a part-time or full-time on-site park manager. This takes care of the long distance. If the park is cosmetically run down and the lot rent is below the market, then that is quick way to increase rent. Also, by having a high vacancy, you can buy in bundle of newer repos in quantity and sell them Lonnie style. This will increase your total lot revenue and give you some good note income.
I’ve been on the fence between apt complex and mobile home parks. I’m better versed in apt complex (10-20 units) than I am mobile home parks. My goal is straight cashflow. Not too concerned about appreciation too much at this point.
I’m looking at cap rates and cash on cah returns comparing the two. It appear MH parks exceed apt cap rates/ROI hands-down.
My questions to all of you who have experience with MH parks are as follows:
-Do mobile homes require more hands-on than apt complex? Do you live on-site, do you manage your own parks, or do you have PM?
-Is it easy to get PM for parks as well as maintenance.
-Most MH parks I’m seeing show very meger maint expenses(5k-7lk for 15-20 lot MH park) also, I assume each lot typically pays it’s own electric/gas is that acturate?
I’m looking at out of state MH parks. Since a parks cost about 800k-3mil where I live.
I’m just trying to figure out why more people don’t buy MH parks. They seem like very strong investments on paper. I’m assuming the image of MH parks is part of the reason people don’t buy them.
Basically, I hate the 9-5 day to day rat race and I have a good chunk of money to invest in something to give me the freedom to leave work.
I have been thinking whether to invest in apt or small MHP for a while. The more I read the better I like leasing out dirt but in SO CA it is very expensive to buy.
I like the ideas of buying out-of-state park and hire PM company to manage it, or I can go out further in SO CA desert and buy something cheaper.
I have bought Lonnie’s books but I need to order Ray’s book also.
Re: 1031 condo for MH park 150k to invest - Posted by bill russell
Posted by bill russell on March 13, 2005 at 14:37:20:
Yes, if it isn’t full of homeowners.
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Never live on site if you are serious about investing.
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You can get it managed by a broker for 7 to 10 percent.
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If you buy a park with over a 100 homeowners you can pay a PM.
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Maintenance can be done on contract, and should be.
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PM’s are a dime a dozen. But be careful who this animal is in the middle of your cashflow.
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Maintenance on a homeowner park of 18 or less can run only 600 dollars a year in some cases where the homeowners are happy as it is and have plenty of security lights and are left to their lifestyle.
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Like Lonnie said, don’t cost much to maintain dirt.
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Never assume, Rosendo. It could make an assume out of you and one out of me. City services are priceless if your park has them, and the homeowner/tenant is responsible for all of that and garbage pick-up with the city. Some gas will be natural, other’s propane, some parks have a well, and septics that must be included in the lot rent. Stick with parks that have city services, just let that be a rule of thumb when you buy your first park.
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People do buy mobilehome parks Rosendo. Stop figuring that one. Deals close each day all over the United States. Study the Birch Realty site and check out the pad prices in the midwest.
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Again, don’t assume. Low end housing is still housing. Monthly rent is established by local markets. Plenty of people buy mobilehomes and parks.
Order Lonnie’s books and Tony’s book and Ernest Tew’s Toolkit, and Ray Alcorn’s manual. George Allen has a site and he can help you too. Read Chrissy Jackson on MH Community managment and you’ll see the future.
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You can buy and sell mobiles and relocatables and transportables and parks and communities for a living Rosendo, it’s a hot market right now. Good luck.
I just agreed to sell a small park of mine in southeast Alabama to a buyer that will pay $166,000 to me in 15 years. I paid $60,000 for the park last March 15th. It originally sold for $17,000 in 1983.
My investment last year in the deed, note, and mortgage transaction was $125 attorney closing fee and the recording cost at the courthouse. The first months income returned my down payment, the closing cost, paid for dinner for the sellers, paid for the security lights, a year’s insurance and the annual taxes. What was my ROI? Cap rate? grin It’s a great business Rosendo!
You seem to be where I was 5 years ago. I was a well-paid software engineer for the DOD and hated it. Also had been a part-time landlord (apartments) for 15 years. I sold one of my buildings and did a 1031 into a 32 unit MHP in NH. Pretty old park, old homes, smaller lots, had been in the same family for 30+ years. Needed a lot of sprucing up. Also had several vacant lots that I’ve been very sucessful at doing Lonnie deals with. Today - life is great! Making very good money, on my own terms and I still have a great up-side potential with this park.
I would encourage you to take the plunge. MHP’s are a LOT LESS work than apartments (as far as I’m concerned). I also own a 56 site campground in NH that I rent the sites out on a seasonal basis. (usually same tenants year after year). It is similar to a MHP park and requires a LOT LESS work than a traditional campground. I dont’s have to sell these people ice and firewood, etc. and I only collect the rent ONCE A YEAR.
I’m all about passive investments. Actually, I’m currently looking for a woodlot. I’ve been told that it is the best of all investments cause you hire a conservator to manage and decide which timber is cut when.
I’m in sf bay area, ca. You must have more to put down than I do. I can’t find MHP in CA that will cashflow with 150k down.
150k is not much in California but it goes a long ways elsewhere. I just need to find the right deal to get me out of the 8-5 rat race.
Woodlots! Now your talking my language. I dont’t want to get too far off forum topic, but a patch of woods purchased at the right price and managed properly is an investment descion your not likely to regret. Watch out for stiff competition from the big timber companies. I would love to trade a little logger’s knowledge for some mhp experience.