MH Park purchase

I am brand new here & seeking advice on how to purchase a Mobile Home
Park in a different state. I have no real estate investing experience
but have long wanted to get started. Here’s what I know: 20 unit MH
park on 3.5 acres, asking $300K with a gross monthly income of over
$5K - all older SW mobiles. I just called the realtor, not knowing
what questions to ask & didn’t get much information either, other than
the seller is unwilling to provide a schedule E? Not sure what a
schedule E is… (I am that green) but it sounds important & sounds
like something that should be provided to the buyer?

I don’t know what type of loan is required for RE investment property?
Strong possibility of securing a private loan at a high interest rate,
I’m sure. We are willing to sell our home ($100K equity), but before
taking any drastic steps towards a deal that seems to be too good to
be true, I’m thinking I should consult a real estate attorney? Any
advise on what questions to ask the attorney, the realtor,… myself??

Thank you all who take the time to read & advise…I appreciate your help :slight_smile:


A Schedule E is a form in a person’s tax return that lists property (like mobile home parks). It contains details about gross income and various expenses.

Basically the realtor is telling you that the seller isn’t willing to document the financial records of the MHP with income tax records.

Very much a case of caveat emptor.

Hmm…Ok thanks for the info. Sounds like a case for an attorney to be involved!

I hesitate to post because I don’t like to discourage anyone but there are many red flags of concern here.

The reason the seller won’t disclose the tax info is because he doesn’t want you to know just how much it ACTUALLY costs to keep these properties running. He would rather “state” a figure that will be far less than actual so that the property would appear to create greater NET income and thus increase the value.

Very big danger here.

Next this type of property, 20 units - all older homes. If these are park owned then for the first year at least you will have a full time job of getting them up to par and from then on a part time job keeping them there.

When you take the true Gross income, less vacancy (and there always is) and a % that you will not collect then look at the mortgage payment. I suspect you may find that there is little left over for your “full time job” and that is before you get into all the other costs such as utilities, taxes, insurance etc.

Again, I don’t want to scare you off, I just don’t want you to get taken.

I don’t know your area so maybe these are all owner/occupied homes that only pay lot rent.

The true value of the property is based solely on the net income that you can verify (meaning you need to know all the expenses and what they really are). For example, is this one water meter or is each lot metered? Do the tenants pay their own trash service or do you? What are the type of improvements that need to be done (just from your driving through)?

How much cash do you have in reserves to take on this park? This does not mean the downpayment cash, this means real cash on hand or sure access at affordable costs, to make improvements, withstand the loss of income after you evict the problem tenants and then rehab or replace their home.


Caution here

Tony’s exactly right and w/o those REAL (verified) numbers too much is unknown and trap-city.

Once had a slick dentist and his conspirator accountant try to slick me on a 24 unit apt complex and they both worked hard to try to persuade me to take their word that everything was hunky-dorey and I should just take their word and back off on seeing those numbers.

A mutual acquaintance bank president did his level best to try to persuade me likewise…not a friend as he couldn’t have cared less about what he did to me.

While I didn’t then know what I know today I knew enough to walk when they just wouldn’t get me those figures.

I wouldn’t expect to receive accurate numbers from the sellers which is why I would suggest that you first determine all the costs, not the numbers, just what the costs are such as water, sewer (well, septic), trash, taxes, insurance etc.

It is not hard for you to get the true numbers on most of this yourself by calling these companies or utilities.

Income and maintenance of the homes is also something I place a value on myself. I would determine the market value (rent) of different types of mobile homes in the area and then drive this park and try and place what I think is fair market value of the income. Then take out a reasonable % for vacancy and money that won’t really be collected.

The reason for this is that some park owners will fill every home with anyone with one month’s rent just to sell the park. These people are often not the tenants you want or will keep. Others will pile several families into one home, state the market rent as several hundred dollars above the market rent and thus inflate the value of the park.

Do the same to estimate the conditions of the homes as best you can (if they are park owned).

I also wonder about that number of homes on 3.5 acres. I would imagine that this is pretty tightly packed but again I am so used to septic system properties in the mountains where much of the land is unusable, I may be wrong here. But even still, you need to consider the size of each lot because if you need to replace a home you may have trouble fitting newer homes on small lots.

Just more food for thought.


Excellent advice! Wow- thank you so much Tony & John :slight_smile: I really appreciate your honesty & concern. Wish I could drive by & get an estimate figure, but this property is out of state. I know, another strike against me! Also, from what I understand, this property is in 2 parcels: the MH’s on 2.5 acres & the other parcel-an acre of bare land. I may be wrong? The few pictures I’ve seen show a cute, well-kept park that looks spacious enough, but you bring up an excellent point Tony: replacing those older SW eventually with DW may not work- space wise.

So… say we are able to determine the following: Prior years gains/losses, total expenses & income, pending improvements required per code (septic, etc), utitlity costs, trash removal services… and the numbers are still in our favor, would you proceed? And would you insist upon a real estate attorney handling the transaction?

Again, thank you so much for taking the time to read & weigh in. Your insight is invaluable!


Let common sense prevail and ask yourself:
How have I educated myself in preparation to become a real estate investor?
How many books have I read on the subject?
How many seminars have I attended?
Why is a MHP the focus of my interest?
Where am I going to live if I sell my house?
How many MHPs have I visited and interviewed the owners or managers?
Who is going to manage my park in another state?
Why is this particular deal “too good to be true?” (usually it is)
What are the demographics of the specific location of the park?
Are other members of my family on board with my interests?
There are, undoubtedly, many more questions to ask yourself. Basically, a rose by any other name is still a rose; i.e. to yourself be true. Good luck.

[QUOTE=Colleen;885037] Wish I could drive by & get an estimate figure, but this property is out of state. I know, another strike against me!

And would you insist upon a real estate attorney handling the transaction?


If I did not live within a few minutes of this property at the time of purchase I would not consider it myself. There simply isn’t sufficient income to support good onsite management, pay the bills, pay the debt and pay you.

And yes, for all real estate transactions I have an attorney close them (many state use closing agents) but don’t be confused… attorney’s cross dot the “i’s” and cross the “t’s” but they do not do the due diligence for you. Others can assist you but once you take possession of any property, you are stuck with whatever the true reality is.



Nothing you have written so far says this is a deal or that you have the ability to do the deal.

First, why are you looking at a MHP when it sounds like you have limited experience? Is this really the best way for you to get started?

Second, while I have property across multiple states and countries, investing remote really does take more skill. It is harder to know what you are dealing with and you have less knowledge of the community. If one does buy, it is harder to monitor what is going on plus you will have extra costs.

Third, I get the sense you are not skilled at looking at deals even if they were local. Due dilligence is all about uncovering missing information and closing the gaps. You have to be able to spot the gaps and then figure out how to contain the possible damage if the gap remains.

It is a really great sign that you are openly sharing here on the forum and asking for help. I do not understand your background and your experience to date. While MHPs can be a great investment they are a niche that takes niche skills few have developed. Even when someone is experienced with other forms of RE investing, MHPs are still a leap into the unknown compared to many other types of RE investing. Specialist knowledge which can be acquired. Having a remote part is more likely to make it hard to come up to speed.

One last thing. You recently said the acre is vacant. Just because they are being sold together does not mean the acre can actually be developed with a MHP. You need to check the current regulations before deciding if the land as any real value.

Thank you all - Tony, John M, Bernd, John C, Tamo42- for taking the time to read my post & respond! I so appreciate your wisdom & advice, which is what I came here for & that’s exactly what I got! While I admit to being green about RE investing, I’m not about to forge ahead with a bad deal & lack of experience. Too many times in the past, I’ve quit something promising every time an obstacle presented itself & I just really wanted to exhaust all options before giving up once again. While I do intend to purchase a MH Park, hopefully in the near future (I’ve heard their great cash cows)- I can see that I have a ways to go educating myself before taking the plunge! Many thanks again :slight_smile:

Hi Colleen,

Congrats for looking into the world of MHs and MHPs. Just as background, I have bought and sold over 170 mobile homes in the last 8 yrs.

MHPs can be cash cows or cash bears. I’m no expert on MHPs but have evaluated five of them, from 7 units to 122 units. None of the sales prices made any sense after due diligence. Either I’d have a full time job at the park (not my intention), the park wasn’t viable as a park anymore, or I would have to come up with a lot of additional monthly cash from my pocket. I made offers that would yield me some money but all were rejected. Naturally, this means either I’m too conservative or they are not motivated.

I have a hard time understanding why anyone would “invest” in real estate if there is no money left over for the investor. How do the sellers ever sell.

The state of the mobile home industry has changed DRASTICALLY in the past 12 years. There are significant (read costly) issues that did not exist for the first 60 years of MHP ownership. This is not to say it cannot be done as several people here and elsewhere have done it. But you want to KNOW all the obstacles and how to manage them.