Posted by Casey on January 12, 2009 at 16:44:05:
Hello all! I sent out some direct mail and an owner in my town called me. He has a 16 unit mobile home park and a 66 unit self storage facility on the same property. The owner grossed $190,000 last year. The park is located in Northern Indiana and mostly consist of 3 bedroom double wides that look very nice.
The owner owns all but one of the trailers and is getting $200 a week for rent. $800 total for the month for the 15 lots which he has 13 of the 15 rented. Isn’t it normal or best to own the pads and not the homes? The rent seems rather high but I have not studied the market.
Is there a way to sell these units to the tenants and make money if I hold the note for them for 3-5 years? I was thinking I could charge $350 pad rent in this market if I just rented the pad. If this was true and I sold the mobile home to the tenant for say $10,000 and financed it out for them, there rental payment to me if it was amortized over 3 years would be %306.49 a month. If you put this with the pad rent it would still be under the total they are paying now. Is there a way to capitalize on this situation?
I know the best thing about mobile homes are that you usually own the pad and they pay you for the space and you are not responsible for anything else. They also usually pay because they do not want to move there home. In this case the owner owns the pads and rents the homes. This seems like a headache and you are a landlord and might have more tenants who don’t pay.
Is potential with a deal like this or would you you stay away?
Thank you for the help.
Casey Cavell
574 527 5122