Is it worth expanding a 10 lot park to 60 lot?? - Posted by Drew

Posted by Tony-VA/NC on October 17, 2003 at 10:11:00:

Drew run an archive search here on topics such as “Developing a mobile home park”. You will find good discussions about the type of expansion you are considering.

I would not suggest this type of deal for someone new. Being new is not bad, so no offense meant. It simply means that hidden costs may cripple you.

This may well be a very cash intensive proposition you are considering. Even with construction loans, it will be a very long time before you see a profit from the expansion.

Bringing in that many homes alone would be expensive. You cannot rely upon dealers and homeowners to fill your park.

Older homes will likely run you $10,000 or more by the time you buy them, move them, set them up, skirt them, decks and stairs, electric hookup, well and septic hookup, inspections and permits. At $10k a pop for 50 homes, that’s $500,000. If you go with newer homes or repos (with fix up costs) it may cost 1/4 to 1/2 more.

Worst yet will be the frustrations of getting through all the red tape; first when getting approval to expand and later with all the inspections.

Then there will be a time delay while you show all of these homes to rent or sell. A park of this size will take your time or you will need to hire a manager part time (it may not support a full time manager/maintenance person). Do you have the time or interest to take on this roll?

I am not telling you this cannot be done but merely wish for you to see what you may truly be getting into.

Best Wishes either way,


Is it worth expanding a 10 lot park to 60 lot?? - Posted by Drew

Posted by Drew on October 17, 2003 at 07:39:02:

My grandfather owned a large area of land around hishouse outside the city limits of Greenville SC. He has since passed away. He has 12 mobile home lots w/ tenants set up on well water (although his house on same land is on city water) and the rest of the land is open field. On my calculations we could expand and have 50 to 60 individual lots. I’m new to this. Just wondering how lengthy of a process it would be to expand and take on a project like this. Is it worth it or should I try and but a park already in existance? I believe we could fill the park up as there is a lot of plants and industry in the area. What are the major costs I would be facing and steps I would need to take. I’m having trouble finding any books that tell how to start mobile home parks. Any info would be appreciated. Thanks

Yes it is, but do your homework - Posted by ray@lcorn

Posted by ray@lcorn on October 18, 2003 at 12:32:12:


Your situation is one that many would search a lifetime for. I assume that the land is free and clear? If so, then you have options available to you that would not be available to others.

The key to developing a park is staying power. There can be a long time lag between getting lots ready and having them occupied. Having the land paid for gives you the luxury of phasing the construction costs to develop only as many lots as can be filled within a short time. The perfect scenario would be to build only as many as can be filled in a year, then do the same thing each year until you complete the project. Construction can be financed with a local bank, generally 100% of the cost of improvements, using the land as equity.

By the way, I would recommend that you develop the park as a land lease park only… no rental homes, and in-park sales of homes only if you can afford very late model homes (almost new) or partner with a dealer to supply the homes. Stability, the greatest value characteristic of a mobile home park, is lost if you fill it with rentals or older homes. Don’t make the mistake of trading short-term cash flow for the creation of long-term value.

But before getting too far ahead of the game you need to do some basic homework. The first step is to check with the local planning and zoning officials to find out what zoning and development standards are required to develop the property. If you need a rezoning, then I would advise engaging a local engineering firm to do some preliminary work before initiating the rezoning. Once you apply for a zoning change you’ll face questions from all sides in short order. It’s best to have as many of the answers ready as possible.

A local engineering firm can help you with the basic site planning that will yield the most efficient design, and also address hot-button issues such as access, storm water detention and utility design. Once you know how many spaces can be built and the basic design of the roads and utilities, then the engineering firm can either give you a ballpark development cost based on area norms, or refer you to contractors who can provide a closer estimate.

What the engineers will not be able to help you with is the market information that gives you an idea of how many lots to develop per phase. That takes some footwork too. You’ll need to analyze population growth in the immediate area, vacancy rates and rents for both parks and apartments, and gather some info on mobile home sales in the area. Talking to dealers may give some insights there, but I am more inclined to get the information from reliable sources such as the number of building permits issued for mobile homes. Put that information together to estimate the likely annual market penetration you can expect, and put it together with your development costs to formulate the timeline for your plan.

Then you are ready to talk about financing, unless your grandfather also left a pile of cash? You’ll need to put all of the above information into a business plan and loan proposal. This will include projections of all construction costs, broken into whatever phasing plan makes sense; a projection of income and expenses once the spaces are occupied, and; a statement of the source and use of funds, i.e. the loan proceeds, showing how the construction will be funded as progress payments are required.

There is only one book I know of that deals specifically with developing mobile home parks. It is an excellent text, and it covers in detail most all of the issues I have summarized here. The book is “Development, Marketing & Operation of Manufactured Home Communities” by George Allen, and is available on his website at

My own book, “DealMaker’s Guide to Mobile Home Parks” is available in the bookstore here on CRE Online. This book focuses on the acquisition and operation of existing parks, rather than development, but the market analysis and financing sections do apply directly to a development project.

Hope this gets you started in the right direction. I usually tell people that development is not for beginners because of the risks. However in a case like yours, with inherited land and an existing park, the risk is greatly reduced. Do make sure you perform a complete market analysis though, because your success depends on it.


expanding a 10 lot park to 60 lot?? - Posted by dandrews

Posted by dandrews on October 17, 2003 at 17:08:57:

Any interest in selling? Take out “no spam” when replying.