More times than not, a mobile home park purchase comes with a turnaround in mind. Often, the previous management/ownership have allowed the place to slip into disrepair and high vacancy, and selling is their way out. Your first step in returning the property to the land of profitability is to gently dis-engage the old owners and managers completely. We say gently because at some point down the road you may need to call them in the middle of the night and ask where the water main shut-off valve is, or something similar. The last thing you want to hear then is the ‘click’ of a phone being disconnected.
The next step in the mobile home park rehab process is to create a plan. Written is best. Rank everything by priority and get comfortable with the idea that it’s going to take a while and a bit of money to finish it all, so you should resolve not to go crazy in the process. What needs to be fixed right away? A massive water leak that is pooling into ponds around the park might be great for the ducks but it’s hell on your pocketbook. The potholes in the road can wait. Fix the water first. Broken or wasteful infrastructure comes before cosmetic repairs.
Break the turnaround plan down into years if needed and weigh the cost of regular inconvenient fees such as a $300 roto-rooting fee for sewer blockages versus $150,000 to replace the entire system.
Are some of the homes trashed? Instead of paying to have them hauled away, plow the money into repairs and then offer it for rent at the price of the lot only. It’s almost guaranteed someone will eventually take you up on it and then you’ve turned a sure-fire loss into a profit. Ultimately, a successful mobile home park turnaround is accomplished the same way you eat an elephant – one bite at a time.
The MHP Listings Team
Flickr / Tambako the Jaguar