Re: Help with Mobile Home Park - Posted by Kevin_TX
Posted by Kevin_TX on March 18, 2002 at 21:54:06:
I may not be able to help you with the comps w/o actually seeing the property and knowing the market, but I can advise you on some other things.
I assume you want to purchase to rent the mobiles out.
Regarding purchasing this whole deal, be sure you look the WHOLE thing over before you commit anything, epecially with the older mobiles. If you are going to turn around and Lease Option the mobiles to make them owner occupied, then that may be somewhat different. Some things to be in tune for are: water leaks, weak particleboard floors, poor insulated water pipes, termites (yes, they climb the bricks and are hard to detect sometimes), and roof condition. Each mobile will have it’s own set of problems and quirks, and you need to view them individually. Another thing is utilities. If the fellow says that the water bill is about $400, don’t take his word for it, get copies of the water bill, and consider that the more mobiles you add, the higher $ per 1,000 gallons that water is going to be. Also, when you look at the amount for property taxes, is should actually decrease if you actually sell the mobiles you have (after L/O option is exersized). Keep insurance in mind, too…both property and liability.
I’m convinced you can make a great deal out of this, but make sure you also have your exit strategy worked out before you leap…old mobiles require alot of maintenance (more than you think).
Do some checking around for used mobiles to do potential Lonnies in those empty lots…even if you don’t buy the park.
Also, when figuring up your comps, keep the “what ifs” of future income out of the picture when you are dealing with the seller. You can really only reasonably expect that the income will come in on what is physically there right now.
And don’t forget the sewer system…is it septic or city? Does it work? Will it work if all spaces are filled? If it is septic, have the tanks been cleaned recently…
Ask questions, ask questions, ask questions…