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A 15 site mobile home park has caught my interest and I would like to know if anyone has any experience investing in this type of property. If so, are there any issues or concerns to which I should pay special attention? (in comparison to a multi-family or apartment building)
As I understand it, the landlord owns the land and rents plots to the mobile home owners. He is responsible for water and snow plowing. Of the 15 sites, 2 are vacant, 11 rent for $325/month and 2 rent for $280. The deal looks like this:
Listing Price: $299,000
Assessment: $93,640
Present Annual Income: $49,620
Insur: $1800
Taxes: $2520
Water: $6000 est.
Maint: $2000 est.
Total Annual Expenses: $12,320
The realtor stated that the owner was anxious and the list price was very flexible. I believe a price in the 200 to 250 range would make this a nice buy. Am I missing something? Since I would be purchasing land only, would it be more difficult to finance? Any opinions?
What's this assessment?
I don't own or operate trailer parks, but I know people who do. Where is this? Municipal water? The water bill looks pretty high to me; perhaps this is an area where water is scarce?
You will encounter some different problems than you would running residential rentals. You should check out your local and state laws so that you know how to handle them.
First, what if the mobile home owner doesn't pay? You'll have to evict them. What is involved in your state? Suppose they abandon the MH on your lot. It is a titled chattel. What are the procedures/how long does it take/what does it cost to have that abandoned chattel removed?
Second, you will encounter landlords who will rent your site, set a MH on it, and run it as a rental. Will you permit this? What will your screening criteria for tenants be? Will you permit the owner of the MH to set anyone he chooses in there?
Finally, the owner is "very flexible"? Why? Could be personal/family reasons, or it could be something you need to know about.
Who cuts the grass? Tenants? Are there any common areas? Clubhouse? Laundry? General store?
What sort of housing standards are maintained in the community? What sort would you maintain?
Seems to me this could be a profitable deal for you, but these are the things I would look out for.
About the Author: Jim Locker is a technical guy who has done a lot of real estate investing and landlording. The experiences he writes about and advice he gives are either first hand, or in answer to specific questions posed by others. He is commonly known as jiml8 around the internet.
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