mobile home park - Posted by Bill Michael

Posted by Skip (CA) on April 09, 2000 at 23:57:51:

Basically you’re buying the dirt and therefore the monthly lease fees are representative of what you are purchasing. Including the rental income to calculate the value of the park skews the purchase price upward. Besides, you really don’t want to be in the MH rental business from what I hear. Look up some of the posts or articles concerning this subject from Lonnie Scruggs, Doug O, and Ray Alcorn, and David S too, in the archives. As an example look up a response from David (S)egars on February 15th under the subject Mobile Home Parks 4 Sale. Yes 40% is killer! It may be too high, but I’d rather be a little too high and be safe than a little to low and not have any cashflow. If you don’t include something for management, even if you’re doing it yourself, you’re working for free. If you don’t include something for vacancies you’re kidding yourself. What about deferred maintenance? What about zoneing? Can the park continue as a park if it’s sold to a new owner? Have the utilities been upgraded? Be sure to get the owners Schedule E, rent rolls, etc
How about the size of the spaces? Are you limited by them? Are the MH’s mostly single wide,double wide or? Again, I’m not an expert on MH parks but it has been my experience that one of the major areas where an investment fails is if the expenses are undervalued. Again, in the archives, you should find a due diligence list by/from Ray Alcorn that is at least a page in length that will give you more information about the park than the present owner probably knows. With this information you’ll be better able to negotiate a “reasonable” price for the park. Hey, after reviewing all the information, maybe you’ll find out that the price they’re asking is reasonable.

mobile home park - Posted by Bill Michael

Posted by Bill Michael on April 05, 2000 at 06:55:12:

I own an 85 space mhp in Joplin Mo, 2 hours from Branson. The park own 74 of the homes. It is a turn-around situation. I need help & I would appreciate your input. I have read all the info on this site regarding parks and I have ordered the Ernest Tew book. I can’t find Ray Alcorn’s book on the site. I’d like to buy that and get his input. Could anyone tell me where to find it?

I am 63 and looking to slow down after about 40 years of RE investing. I would love to sell the park to some of you younger players, but if I have to turn it around myself, I’ll do that as well. I notice that many of you are having difficulty with park managers and owners. I would be happy to work with you in the Joplin area.

We have older trailers that need to be moved out. We have 22 vacancies and 2 vacant lots. We are located on 10 acres of prime real estate located at the crossroads of America, at the junction of I-44 and 71 highway. We have all city utilities. We have a huge traffic count on the main artery that runs in front of the park. We are about 1/4 mile away from a new Flying J truckstop. We are probably about 10 years away from selling our land to McDonalds or a motel, etc.

I would also like to attend the convention. When is the next one? And where? I was unaware of this site until someone at the SDI LeGrand convention mentioned it in January, 2000, in Orlando. Also, did someone mention a convention in Utah in July? I would like to attend it as well, if someone would please let me know the details. Thanks.

I am having trouble with my email, so please be patient if I don’t answer immediately. I’m trying to email Ray Alcorn, but I can’t seem to get through. I will contact my local provider today, as soon as they are open for business.

Thank you in advance for you input and help.

Bill Michael

Re: mobile home park - Posted by Myrna Warford

Posted by Myrna Warford on April 05, 2000 at 18:33:18:

I grew up in Picher, Oklahoma - just 25 miles from Joplin. Please e-mail me directly with particulars on what you have and what you’re looking for. I might be interested.

Re: mobile home park - Posted by Ed Copp (OH)

Posted by Ed Copp (OH) on April 05, 2000 at 13:03:20:

Bill, This looks more like a long classified ad than a posting…ED

Re: mobile home park - Posted by ray@lcorn

Posted by ray@lcorn on April 05, 2000 at 08:46:34:


My email address is

The return address I use in postings has a “nospam” attached to cut down on unwanted junk mail.

Look forward to hearing from you.


park seller offers $225k fin at 8.5% 20yr …gross incm $4k/mo - Posted by leslie

Posted by leslie on April 07, 2000 at 01:58:48:

just happned across this and never bought one before. 17 units on one acre in sacramento area of california.
wants 10 to 15%dn. $200k to 250k is asking price and he will finance at 8.5% 20y. gross income is $4k/month. space rent is $170m for 17 spaces says it can go up to $15 or $20 hasn’t been raised in 4 yrs and always full. 4 units are park owned. it sounds good to me but what do i know ??? i thought i would offer a note on my other property for the dn, it seems like he doesn’t need cash. he owns two other larger parks. all are free and clear including his personal house. is moving out of state, bought the next home already.
any input is lovely…

Re: park seller offers $225k fin at 8.5% 20yr …gross incm $4k/mo - Posted by Skip (CA)

Posted by Skip (CA) on April 07, 2000 at 15:04:43:

You’ll get more knowledgeable answers from the MH pro’s but just from the numbers you’ve posted I’d like to take a whack at it. First off the income is $2,890 per mo. based on 17x$170. You shouldn’t count the rental income from the 4 rentals. Second, expenses. I use 40% on income property so I’ll use it here too. Adjusted income $1,734mo x12= $20,808 NOI. The cap rate you use will obviously determine the acceptable price. If you use a 16 cap (small property)you get a price of $130,000 + the value of the 4 rental homes whatever that is. If they are worth $2,500ea, as an example, your price would be $140,000. $140,000 @8.5% x20yrs= $1215 per mo. By the way $225 @ 8.5% x20yr= $1953 per mo. by my calculations which is $200 per mo. out of pocket if my expense calculation is accurate. Obviously your ability to get this deal at a workable price is dependent upon his motivation. If he won’t sell at a reasonable price, and you’re still interested, you might offer to lease option the park @say $1200 per mo. with the entire lease price to be applied to purchase in 1-2years. Thanks for letting me exercise my calculator on this. Sorry for the length.

more income, less expenses - Posted by leslie

Posted by leslie on April 08, 2000 at 12:34:50:

Thanks for the input, help me understand

  1. why not count the income for the 4 park owned units, the buyer will own them and have the cash flow.
  2. 40% is a killer isn’t it. i think that’s where most new investors fall down.
  3. is 40% too high? when the tenants own their own units some of the upkeep you would have in a multi-family is mostly theirs. i don’t know how much to allow, i will get water/sewer bills from the city, i thinks its $400/mo.