Posted by Ernest Tew on February 01, 2001 at 04:31:02:
It sounds like the owner may have sufficient motivation–the first requirement for getting a good buy. However, there are numerous other considerations. For example:
Is the park close enough for you to manage and maintain it? It is too small to employ someone else to do it.
How large are the lots? If they are too small to handle today’s modern homes, you may need to reduce the number of homes in order to upgrade the park.
Does the upside potential of the park justify the cost and effort that will be required to upgrade it? If you rent mobile homes instead of selling on terms, you will not be able to upgrade the park and you will have problems with collections and repeated damage to the homes. And, your operating expenses could be in excess of 50% of the rents you could collect.
After checking it out, you find it still looks good you may want to offer to lease the park from the owner with an option to buy. The owner might feel more secure if you offer to pay the first year’s rent in advance. And, you wouldn’t have any payments for the next 12 months, giving you a chance to get your money back before making additional payments.
If you would like to discuss it further, give me a call at (352) 475-1280 today or tomorrow. After that, I’ll be out of town for a week.