Make sure you know the financials: income & expenses. Then come up with a price, get it under contract, then do your due diligence. An old saying is “You don’t steal in slow motion”. If you wait for the city to inspect it or you getting a copy of park rules from me or anyone else, you run the chance of losing this deal.
As for working the park full-time, if you have a job that you like, then hire a park manager. That is why mobile home parks are a great investment, they have great synergy.
If you want to run by me or anyone else what you should buy this park for, then give us all the details. I’m sure we can come up with a number by Monday. Meet with the owner Monday, and sign a contract with your due diligence list and a weazel clause. I look at a lot of deals. When I find one that is really good, I jump on it. It may fall thru because the owner lied to me about a detail. However, I don’t lose the deal to someone else.
I found a park and I think the numbers will work with the finacing I asked for but I would like another opion. The seller is burnt out and let the park go down to the point of not paying an extremely high water bill and the city closed it 2 months ago for non payment. He had a master meter and tenants refused to pay the additional $35 each month that he started charging for water/sewer/garbage.
Its a 23 pad park in the city and 5 park owned homes, he’s charging $135 for lot rent and $35 for water, he just put meters on 9 pads and has the meters to install on the other pads, he only had 10 other lots rented when it was shut down. This park comes with additional land that will hold 6 more pads and is zoned for mobiles. The seller has cleaned the park and will pay water bill before I buy it. Sales price of $150,000.00, taxes $1300.00, insurance $600.00, security lights $62.00, replace 9 electrical boxes (parts were stolen since park was closed) $4000.00, I’ll install other water meters. Owner will finance with 15k down, 15 years @ 7%. He is willing to let me pay according to how many lots are rented until I bring the park back up to pay the full note with no penalties or interest. 5 tenants want to move back in to their homes and I still have the five park owned to Lonnie. After park is making money to cover note then I’ll pay remainder of notes that were short when I started. The park is 1 block off of the beach and the average rent for lots in town are $175. I plan on raising lot rent $20, doing Lonnie deals and managing it properly. I know there is other cost but this is all the owner is putting in this park. I would appreciate any advise on this and this will be my third deal if it happens in 3 months thanks to Lonnie’s books and this sight.
I like these numbers. Also, if the owner is really motivated than you can work out the Note payment structure to match your income. I would definitely get this under contract.
I have a couple of questions. What is the going rent for the park owned homes: home rent and lot rent? How much would a small cabin or camper rent for during the summer season? You mentioned that the property is one block from the beach. I would want to keep control of the lots, and leave myself the option to be in control, if I want to change the use of the land. Most areas don’t like mobile home parks because the occupants cost the town a lot of money (schools for the kids) and don’t pay much in property taxes. However, an RV Park, campers, cabins are the opposite. Doesn’t cost the town anything, and they spend all their money in the town. If the vacation market is strong, I would look into converting the park into an RV Park or cabin rentals. In Maine, if I have a mhp on the water, I may get $125 to $200 for lot rent each month. If I convert it into an RV or Camper site, I can get $2400 or more for an annual fee and even more on a nightly basis. If I put in cheap cabins, I can get $500 to $800 a week for the summertime.
As I have stated in past posts, I like to look for the “free cashflow” or “free lump sum cash”. Like being able to expand the park. Or shifting the property use to a higher profit use. Like mobile home lots to small rentable cabins or even rentable campers.
The bottom line is to get this under contract now. Give yourself a few weazel clauses: “The buyer has 30 days to inspect the septic and water systems. If the buyer is not satisfied with the systems, the buyer has the option to void the contract.”
Re: 23 PAD PARK, NEWBY NEEDS ADVISE - Posted by Joe C. (AR)
Posted by Joe C. (AR) on April 28, 2005 at 22:55:09:
I’d do it if you’re sure the local authorities will let you re-open. I’d also ask for no payments for 3-6 months from the owner lender, to give yourself a chance to get it “paying” again. With the park empty, this is the perfect opportunity to raise the rents up close to market. Get as much as you can now. I’d go to $175/mo with a discount for “on time” rent payments (no discount after the 5th of the month). Lonnie deals are the key to filling it up again even if you have to sell partials. It doesn’t matter what the lot rent is as long as the note and lot payment combined come in at around the price of an apartment. Make sure that all new tenants know that water will be billed separately by you. Price is a little high for the present condition but with the terms it can be a little cash cow for you.
Just my .02
Joe C. (AR)
I like the idea of summer rentals but I’m not to excited about having to work the park full time, I do still have a JOB for 2 years (military retirement). I found out the additional land attached is 95’ x 450 with a seperate road entrance and is zoned for mobile homes. I’m thinking about your idea of RV sites on this property to experiment on the income flow. I have’nt signed a contract on this yet but I feel that it’s a done deal, the owner and I are waiting on the city to inspect the property and turn the water back on and then I’ll move on this, also I found this by riding around and just stumbled on the owner cleaning it up and asked about it and that’s where everything started, I don’t think he was planning on selling it until I asked. Since you mentioned it I’m starting to think I might need to get this under contract soon. Do you have or know where I can get a copy of park rules and regulations. Thanks for the advise and I’ll keep you posted.