As will any real estate investment, it is important to buy at a good price. That we did. Of all the searching we did, this was by far the best deal we came across.

Also, I have talked about cash flow many times and how important it is. This park puts out a very nice cash flow and this cash will allow us to improve the park over time and increase that cash flow in the future.

Lastly, financing a park in this market is critical. The wrong financing has put many parks back in the hands of banks and the previous owners. We were able to get seller financing for 10 years at an excellent fixed rate and private financing through a private lender’s equity line of credit. This makes the repayment of the park so much more manageable.

Get your properties at an excellent price with good cash flow and finance them properly and you can’t go wrong.

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