Looking for Mobile Home Parks
Mar 31st, 2009 by kyle
KGE Real Estate is looking to invest in mobile home parks. We are mainly targeting the southern United States but if you have something in a different region that makes sense, we would like to take a look at the numbers.
The process we follow is to look first at the financials and see if the park worthy of further investigation. If so, we then look at the area to see if it makes sense for an investment in mobile home parks. If the park still looks good, we will negotiate with the seller and put a contract in place. Finally, with a contract secured, we complete our due diligence to ensure we are buying what we think we are.
Only during this due diligence phase will we make a visit to the park. The looks of the park are very much a secondary consideration after the financials. Whether the park is a 1 star or a 5 star, the important thing is that it has good cash flow. Remember, Cash Flow is King.
The specifics we are looking for in a park are as follows:
- between 30 and 100 lots
- mix between park-owned and tenant-owned homes
- some seller financing available
- minimum capitalization rate of 10% based on current rent roll
- city water and sewer (no well and septic please)
- room for improvement at the bottom line through improvements or optimization
If you know of a park that fits these criteria, send me an email at info @ kgerealestate.com
We are currently own over 30 acre of vacant land in Horry county, SC and would interest to learn more if we can convert part of the land to build Mobil home park for investments. Thanks.
Hi Lucy,
The first thing you need to do is check with your county about the possibility of building new mobile home parks in your area. In years gone by, cities and counties turned away from mobile home parks or put such heavy requirements on them that it was hard to create new ones. However, because of the economy, some cities and counties have now begun to embrace mobile home parks because they understand that they are an excellent source of affordable housing for their residents. There is a lot of work that would need to be done, so don’t bother doing any serious work until you know what they have to say.
Best of luck,
Kyle Edginton