Buying a mobile home park - Posted by Craig
Posted by Craig on September 17, 2004 at 13:20:15:
Is this strictly for buying Mobile homes
I have a deal to buy a mobile home park, and I’m not sure what I should be looking out for.
This is in a very small community, I think only about 5000 people.
On the plus side, it is selling for 25 to 30% of its FMV.
Lots of upside. It has been very badly managed due to absentee owners.
But on the downside. The park is only half full and the tenants there are not paying the rent.
And there is a large mill 30 miles away that recently closed down. The mill has been purchased by another company and may reopen.
If the park was full it would have a CAP rate of 23% which is incredible. It would pay for itself even with just the current tenants. (if they were made to pay)
There are also 3 houses and a small coffee shop there, all are currently empty. One of the houses is damaged from a grow op and needs some repairs before it can be rented.
My take on it is that it is a really high risk with a potentially high return.