high-end mobile home park - Posted by Barry

Posted by Barry on May 24, 2002 at 10:24:22:

Thanks for bringing me back to earth. Your comments (especially about dirt made of gold! are sobering). The problem is that homes here start at around $750,000 and those are high in the canyons. Most with views are starting in the millions. The prices have gone up about 20% just this last 9 months or so. People with homes in Beverly Hills and other areas frequently buy these mobile homes for cash, just to have a beach place at the ready. The figures are inconceivable to me also. My biggest fear is that the prices have peaked for some time, yet we have an influx of New Yorkers and other people flush from pulling money out of the stock market, who are offering well above asking prices for a piece of an ocean view. Prices here through the years have leveled (especially after fires and floods and such), but always climb again. Any thoughts?

high-end mobile home park - Posted by Barry

Posted by Barry on May 16, 2002 at 10:07:22:

I rent in Malibu, California and am trying to buy a place to rent out for the appreciation. As most homes with ocean view start in the $700,000s and up, I’ve been looking at the mobile home parks. These are also expensive, but command high rents. I found a great one at $450,000 with wrap-around ocean views. The mortgage was around $2,000 per month. Just one problem: the lot fee was $1,500. As I understand it, this isn’t tax deductible like the mortgage payment. I could still probably be in the black with a renter, even at those prices. But the tax situation as well as the fact that I wouldn’t own the land, both scare me. Is it still a decent investment?

Re: high-end mobile home park - Posted by David

Posted by David on May 22, 2002 at 24:46:34:

Probably the biggest variable to consider here is resale value. Besides market drive, lending is another major force in the mobile home biz, and finding lenders for potential buyers becomes next to impossible b/c there are very very few mh lenders who will touch this. That leaves you with only cash sale or owner financing if you need to liquidate that thing. The other problem is if the market continues up the park may raise the rent to the new buyer at that time, effectively lowering the price of your home. This has been my experience in homes I’ve sold in Laguna Beach for what its worth.

Is this area under rent control? - Posted by Dave Swett

Posted by Dave Swett on May 17, 2002 at 23:43:54:

Is this area under rent control–like Escondido and other areas in LA? Rent control transfers a huge amount of value from the dirt to the MH. Right now, there are several lawsuits trying to upset the very restrictive rent control laws of MH.

I live in Santa Barbara and a local MHP is renting at $250/month under rent control and mediation is in process to raise the rents to $1200/month. In our area, this is still cheap rent. The MH are selling in the $150k range and they are oldies with no real fancy benefits except the cheap rent. If the owners are successful in their mediation, then the rents will increase (probably, they won’t get their full increase, but I’ll wager they will get a fair chunk of their $900 request) and the $150k selling prices will drop like a rock.

If your attractive MH has rent control and if the limited rents are overturned, the numbers will float to whatever the market will bear and it will be a lot more than the $1500/month for California ocean front property and that $450k MH will plummet in value.

Rent control is so dangerous cuz it is an artificial control of the market place by the politicians. New Politics give new laws.

This would be a good deal to put into an LLC or Corp so that a BK wouldn’t ruin your credit.


Buy a park somewhere else instead - Posted by DougO(NM)

Posted by DougO(NM) on May 16, 2002 at 16:19:48:

for $450,000 you can get a heck of a lot more appreciation and cash flow from buying a whole park somewhere other than your local market… that is of course if you want to. Just food for thought…(That’s what we did anyway )


Re: high-end mobile home park - Posted by ray@lcorn

Posted by ray@lcorn on May 16, 2002 at 12:47:50:


If by “lot fee” you mean space rent, then it is a deductible expense just as any other.


Re: high-end mobile home park - Posted by brad

Posted by brad on May 16, 2002 at 10:27:40:

these prices just blew my mind, please clarify what your looking at. i may be wrong but it looks like your looking into buying a mh at 450000. please tell me this is a typo or a joke. if this is for real give me the zip code so i remember never to move there…lol

Re: Is this area under rent control? - Posted by juan

Posted by juan on March 03, 2003 at 24:33:10:

I live in the following address:
543 N Madison Ave.
Los Angeles, CA 90004
Please notify me if i’m under rent control.

Re: Buy a park somewhere else instead - Posted by Barry

Posted by Barry on May 24, 2002 at 10:28:27:

Thanks for your sobering comment. It is food for thought and scenario well worth considering!

Now Doug… - Posted by JHyre in Ohio

Posted by JHyre in Ohio on May 17, 2002 at 06:55:23:

Tell the WHOLE story- that when you bought that park, it became your local market, because the mountain went to Mohammed, LOL! Hope all is well.

John Hyre

Re: high-end mobile home park - Posted by Barry

Posted by Barry on May 24, 2002 at 10:17:50:

As you can tell, I’m new to this. Thanks, I didn’t know the lot fee was a deduction if you rent the unit. That certainly helps the equation.

Re: high-end mobile home park - Posted by Barry

Posted by Barry on May 16, 2002 at 10:50:43:

That’s correct – $450,000! With a $1,500 lot fee. Keep in mind, rents start at $1,500 for a one-bedroom with no view – if you can find them! In general, even in a lower-priced market, how should I view the lot fee in determining possible profit? Is it a dead-end monthly expense?

Re: Now Doug… - Posted by DougO(NM)

Posted by DougO(NM) on May 17, 2002 at 13:36:32:

We’re weeks, maybe days away from child #3, and in the process of moving out of the community into our new home. Boy, is this a process I can live without! I plan on putting the entire development process onto my website so folks can see what a high quality manufactured or factory built home can look like. I just hope I can find the right finish for the flagstone… Once we move out of the community completeley, I will turn my attention to the office and redo it to make it all office. Looks like a busy summer, then maybe I can get back to buying, selling and financing! I’m just glad to have the ability to sit on my “assets” and let them work so I don’t have to, I think I’d go more nuts if I had to deal with all this AND a J-O-B!

Take care, best to you and yours.


More money than common sense (nt) - Posted by Chuck

Posted by Chuck on May 16, 2002 at 13:30:03:


Re: More money than common sense (nt) - Posted by brad

Posted by brad on May 16, 2002 at 13:51:40:

veiw the lot fee as you would any other expense. your market sucks, at least for my budget. i have to knock a few zeros off your numbers just to get my brain to compute the information. 45000 150 now thats better. the ratio is not bad and in order for someone to consider this they would have to have a pretty good income. i personally wouldn’t want this as a rental. if you have the ability to buy it i would recomend selling it on an option with an ungodly amount of option money or owner finance it with a huge down. this is outside of my comfort level so i can’t give you a good evaluation of the deal but you know your market. what i can’t figure is why anyone that makes enough to qualify for this home would want a mobile home. even with the veiw. don’t let the wind blow too hard because that dirt is made of gold. i only hope someday i can look at a deal like this one and not be intimadated by the numbers.