Posted by DougO(NM) on September 04, 1999 at 22:39:30:
For starters, read the Turning Trailer Courts into communities in the Money making Section. That will help you undertand the most important thing. Does it make any money ? How is it priced based on how it performs. Is it in an area that will allow it to make money ? (sufficient jobs that pay enough for folks to pay you rent ) Is there a need for this type of housing in the area ? As far as the property itself, here are a few guidelines to start from. On one end of the scale you have trailer courts, dirt roads, small spaces, usually master meter for utilities, septic tanks, well water, old funky trailers way out in the country with no economic base to support it. The other end you have the high end “corporate” type communitywith the big club house where the folks get together for potluck and to play bingo, paved streets with curb and gutter, underground utilities individually metered, city water & sewer, professional management, large lots to fit multi section homes (60 x 110 or so) and are usually are located where folks can afford to pay to live there. Then there is everything in between. I suggest you drive through as many MH Communities as you can then go to this one, you’ll get an idea of what you are dealing with. When you talk to the seller, if its an agent or broker worth their salt they will have a listing package. If not, you will have to put one together with their assistance or that of the owner. To start, you can get by with the financial records (3) years of P&L’s and Balance Sheets, and at least one of those years need to be monthly, year to date monthly P&L’s & Balance Sheet, Current Rent Roll and rent increase history. That, along with you driving around like I said and doing your own market study (fidning out the average rent, what it includes and the vacancy rate is in the local area) should be enough to help you decide if you want to write a purchase offer. You’ll also want to know all the standard RE stuff like : Why are you selling, how mcuh do you want, what kind of terms are you looking for, what is the current financing, etc.
Hope that helped a little.
Doug