Is Mobile Home Park A Good Investment?
I am a rehabber (was a remodeler for 30 years, am now doing them for myself), and I was offered an opportunity to purchase a 14 unit Mobile home park in my local area.
It is not a high class park, has 10 older units set up and owned by seller, and 4 vacant spots ready to have units brought in. These are alll single-wide units. The seller picks these old MHs up for $1000-$3000 and rents for $250.00 each making a total income of $2500.00. I am not sure yet what the gas and sewer costs are, so I am not sure what he nets, though I would have to guess around $2200.00. per month.
The Seller is getting along in years and is tired of the landlord thing and so he offered to let me have it for $90,000. He wants $10,000 down (no problem, I have it) and will finance the balance himself at 8% for 10 years, with payments about $972.00 per month. This leaves a pos. cash flow of approx $1200.00 per month.
This would be a no-brainer, were it not for the fact that it is not my niche, and I do not know what hidden problems may or may not lurk beneath the MH and MH park business.
The park is situated alongside some railroad tracks, but he says he has no problem keeping the units rented. Other than the railroad tracks, and a few dumpy houses on either side of the park itself, the setting is nice, green, big trees and has a pleasant feel - not a lot of trash and junk.
What do you think?
You noted that the owner is making payments two loans.
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<br />You said the MH is on land.
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<br />Should we assume that the MH is still personal property and therefore the title has not been retired (converting the MH into real property by being physically and legally attached to the land)?
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<br />What does the owner expect to do with the land and the loan on the land?
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<br />If you buy the land and the lady stops paying for the MH you can notify the lender on the MH that you are the landlord and they need to move the MH or you will file to take it as it is abandoned on your property. Someone more knowledgeable can fill in the details for the legal process.
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John Corey[ Edited by JohnLocke on Date 08/25/2005 ]