Posted by Mike Cheatwood on August 06, 2005 at 15:11:24:
Jacqueline,
You can do that but it is one of those “hard to get there from here” scenarios that requires you to first take a hard look at the profit angle as well as how much cash you will have to “front” to make the deal work. You should also consider how long you can accept the negative cash flow from such a “vacant” deal until you have the lots/homes purchased, moved in/set-up, and then rented out or paying on notes.
There are also the issues of:
Will the local zoning/planning dept. allow the land to still be used for mobiles?
Will the current lot sizes accomodate modern homes or will the park have to be reconfigured at some substancial cost?
Will the current power boxes handle later model homes or will all of the power boxes/cables also have to be redone at some extra expenses X # of lots(i.e., per lot amperage load/200Amps is the “modern” requirement in my Park but some older Parks only have 60 Amp boxes…).
Might want to check out the Commercial Site for Ray Alcorn’s prior postings on “developing mobile home parks, etc…”.
I have found a lot for sale that once was a mobile home park. It now is vacant but has the setups where each trailer used to sit still visible. How can I purchase the land with the plan of putting new mobile homes on it and making money by selling them and renting the land they sit on.
Posted by Tony Colella on August 06, 2005 at 15:24:28:
Mobile home parks are typically valued based upon the income they provide. There are many, many considerations when buying but they are compounded even further when the property is either raw land or a former mobile home park that is no longer operating as such. Zoning and environmental issues will be among them.
First you need to determine if the property can still operate as a mobile home park. If it can, you then have the challenges of determining how much it will cost you to get the park up to modern standards, how long this will take and where the money will come from.
Mike and many others here will be attending our Boot Camp coming up next month where we will take everyone out to our parks, walk the grounds to see where problems can arise, learn how to account for them and overcome them, how to anaylze and value the small parks, how to build your profit in first, how to operate the park, how to purchase these parks and much, much more.
If you should have an interest in the boot camp you will find many posts about it here. This may be just what you need to put your deal into perspective if you should decide to join us.
If not, no problem. The folks here are always willing to help you at least crunch some numbers. If you care to post the figures you have, we all may be able to shed some light and opinions on how to proceed.