Mobile Home & MH Park Investment Open Discussions

[VanDyne]

After jumping from topic to topic I landed in one particular topic that was posted back in 2005 and had no replies. I replied to the member who posted it and got no response.  However, another member saw my reply and responded. A week or two later and several others have weighed in on the discussion.

At times the replies almost resemble a little debate yet at other times sharing of very good information allowing me to consider other views and helping me to decide what I will target as my first significant RE investment project.

I am very close to taking a giant leap. This leap will allow me to either move out of my current slave job very quickly, almost immedately, or to move more slowly and inch out. I hope it's immediately.


My hopes for this topic is to spur informative discussions, pros and cons, sharing of knowledge and experiences (good, bad, funny and sad) and healthy professional debate.

What would mean success for this topic? If a few members partner together for mutual success or mentor those members who might be struggling to take that leap into RE independence.

I will end this initial introduction and let this topic grow on its own.

[VanDyne]

I would like to hear if anyone has picked up a poor performing mobile home park. What were some of the things you did immediately to correct problems?

[VanDyne]

Does anyone know what the cost is in running electric into lots in a MH park?

I know the different power companies will have there own rates and where it is the country the price will vary but let me know where your estimate comes from and I can make the adjustment.

[tatertot]

Do you mean how much to run power to sites that have no electricity?

Why guess? Call the electric company that serves that area and have them send someone out to measure it up and give you an estimate. They will figure the distance from the power source and the cost of each meter.

More than likely, you will have to provide either all the power poles or do all the trenching.

Do you mean how much will the electric cost if you provide power to each site included in the rent. Figure between $300 and $500 per site, because if it is "free", your tenants will squander it.

[VanDyne]

Thanks tatertot:

I thought I might have to have them come out.

I have read where apartments complexes and MH Parks provide water then try to establish a rate to cover the cost. The waste is tremendous. The only place I've seen it work was when I was in the military. I was also a military dependent. My father was a hawk when it came to leaving lights on or taking a long shower. He'd pull our allowance in a heartbeat if we wasted utilities.

I'm a mizer.

[justin0419]

That's because your father was responsible and tried to instill that in his kids.  Trust me, I've seen plenty of military families not care about abusing the utilities in base housing. 
Providing water can work out ok by not having to pay to meter each apartment separately, but I'd never provide electric or gas. 

[VanDyne]

For those of you who have owner financed mobile homes.....

- Do you require your buyers to carry homeowners insurance to protect aginst loss?

If it burns down and the owners walk I think the city/county or maybe the park may require you as leinholder to remove the MH from the park which would be a big expense. Or, maybe as leinholder we would not be liable.

[G-man422]

Hello VanDyne,

   Are you referring to selling the M.H. on a note? If so, I do require the buyer to have coverage on the mobile home.  Just like you say, that way if it burns down, I still get paid.

[Rob in Atlanta]

I am actively buying small mobile home parks that are poorly performing at an average of $3k per pad and turning them around by adding homes, selling the homes owner financed, selling the notes at a good yield to IRA accounts, using the proceeds to pay myself back for the investment, having the 'dirt' free and clear, then collecting unencumbered lot rent.  Then I put the property back up for sale at $10k per pad and wait until someone pays.

Just did another the last quarter of 2010.  Sold the park to a resident with owner financing.  Plan to keep the income for a while as it is paying 25% yield.

Let me know if I can help.

Rob

[VanDyne]

Hello again Rob:

$3000/lot on a nonperforming park is probably about right if located in a good location and the park has maybe a couple of amenities.

Are you paying $3K/lot even on the vacant lots? Or, are the vacant lots part of the reduction in the overall lot price your paying?

It's good to hear someone responding with some experience. I just seem to be stuck. I start a new job on Wednesday that will give me a little better annual salary but will tie up a lot of my time. I'm starving for an opportunity that will break me free. As I responded to another one of your replies on one of my other duscussion points (I won't repeat it) my situation is not necessarily lack of management knowledge but the ability to come up with a down and the remainder of financing. My first park will need to be 75 lots or greater and not a slum. Bad current ownership, yes, but initially I plan to live and manage the park for the first 12 to 18 months as a turn around period. I have turn around experience in a couple of industries as well as retail taking a nonperforming small retail store that had never made a profit since opening and turned it into a million dollar operation.

After the 18mos I'd look for another park opportunity and do it again. I want to own these parks for at least 7 years and maybe a few for long term. I've lived in a park in Phoenix Arizona and actually loved it. It was my brother-in-laws MH and we cleaned it up along with the lot. That spread through the park very quickly. By years end every home on the street was cleaned up and the park was looking really nice.

It was so easy to repair and the size of the lot was even easier to landscape and maintain.

I thought about searching for a MHP in southern Florida. I've live there for many years as well and wouldn't mind returning. But with hurricanes I don't think I'd enjoy having my investment wiped out. I do have some ideas on how to secure MH's better to withstand hurricanes.

I would like to add you to my contacts list. If you can email your contact information I would appreciate it.

Frank Van Dyne
F

[ozm]

I am actively buying small mobile home parks that are poorly performing at an average of $3k per pad and turning them around by adding homes, selling the homes owner financed, selling the notes at a good yield to IRA accounts, using the proceeds to pay myself back for the investment, having the 'dirt' free and clear, then collecting unencumbered lot rent.  Then I put the property back up for sale at $10k per pad and wait until someone pays.

Just did another the last quarter of 2010.  Sold the park to a resident with owner financing.  Plan to keep the income for a while as it is paying 25% yield.

Let me know if I can help.

Rob

nice model!

[Rob in Atlanta]

Thanks!!

Rob