How to Buy a Mobile Home Park that Will 2-3x Your Money in 1 Year

Get on Google maps and search "mobile home park" in your target area(s). Avoid NY & CA.Make a Google sheet of the leads and use Loom to record your screen.Spend 30-60 mins doing this. Phone numbers are key. Research area crime and unemployment rates. The 2 biggest factors.

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Go to Upwork and hire a virtual assistant to keep doing this for you. Use that same Loom link in your posting so applicants can see what the job will entail. They will cost about $4/hour. Or you can use a VA agency to find someone for you. More leads = better deals.

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Cities with 2,000 - 20,000 people are best (better deals). You want parks with almost no web presence and little to no reviews. A Dollar General nearby is great. Walmart is better. If there's a Whole Foods you ain't getting a good deal.

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Call up the owners and be real. Don't talk about any accolades. He doesn't care and it will hurt you. You're a hard working country boy. Are you a democrat? Don't tell the owner that. (Sorry, democrats).

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Here's your general pitch:

"I'm not a broker, I'm just looking for some good real estate and don't want to waste your time with a lowball offer."

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Tell him about your wife and kids and what you do on the weekend.Most importantly, LISTEN. He's going to talk your ear off. This is a good sign.

Ask him: How many pad sites?How many of those have a unit on them? How many of the units are RVs? (It's common for there to be a mix of MH/RV). Are the units park owned or tenant owned? (this is key). If a mix, what's the mix? Any single family homes on the property?

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Park-owned homes you have to maintain. AVOID AT ALL COSTS. Tenant-owned homes are key (lot rent). This means you only rent out the land and underground infrastructure. You'll command half the rent but enjoy 90% less hassles. $250 or so is common lot rent in the midwest and SE.

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What's the occupancy and rental amount of each type of unit? Any outbuildings on the property? Septic or city sewer? If septic, conventional or aerobic? Sewer is best. Within city limits or no? City limits are best but rare. Outstanding municipal or zoning issues?

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How much is insurance? How much is landscaping? Asphalt, cement or dirt roads? Condition of the roads? Any drainage issues? Is there a manager? What do you pay them? Best if no manager.

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Any pending litigation? What are total collections? How do people pay rent? How many are delinquent? What condition are the units in? Do you have a lien on the property? How long have you owned it? 30 or 50 amp? City maintained streets? City water or well? City is best.

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The key question: "If we were to make a deal, what's a ballpark offer you'd expect?"

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Don't anchor him with "bottom dollar" - Using the word "ballpark" keeps numbers loose. Whatever number he says, you want to pause and hem and haw over it. Embrace the silence and awkwardness.

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Tell him you'll get back to him tomorrow. Thank him profusely for his time and congratulate him on the park he's built. Now's time to crunch numbers.

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What's a cap rate? The net operating income of the park divided by the price you'd like to pay. If you want your money back in 5 years and you're willing to pay up to $1m, you need $200k net profit per year. This is a 20% cap rate (20 cap). It's aggressive but possible.

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Start w/ a smaller park & higher cap rate. More room for error. $300k - $1m. First do some market research:Remember your leads? Call competing parks as a potential tenant and ask what their lot rent is. Put this in a spreadsheet to get average. Lot rent & park-owned home rent.

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Keep in mind many of these parks will be undercharging as well. Find out avg lot rentIt's common to find parks charging $100 that could charge $250.When calculating cap rate BE CONSERVATIVE. Don't count on 100% of people staying if you increase rentsUse $175 to be safe.

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Shoot for a park that will net $100k/year after rent increases that you pay no more than $500k for. The more leads your scrape, the better chance of finding this park. Shoot for as much seller financing as you can get. Finance the rest with friends/family or savings.

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Once you find this park, get it under contract. Use a standard, simple real estate form that you can find on your state's real estate commission website. Texas' is called TREC. Yes, get it under contract before seeing it.Put down earnest and option money, and then go see it.

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Don't dress like a city slicker. Be personable and be willing to stay a while and BS. Inspect the condition of the units, even if you aren't buying themCrappy units = more tenants willing to abandon them. And they aren't cheap to remove. Verify everything he said on the call.

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If all looks good, start on the inspections: Septic or sewer lines. SFH home inspection. Check with the city for outstanding issues or litigationCheck for liens. Waste water treatment plant? If so, abandon ship! Electrical infrastructure. Use professionals for all of these.

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Ask for: Rent rolls. They will likely be handwritten. Bank statements. Ask to speak to a few tenants to get their experience. Inspect their lease. Ask for vendor invoices or history of payments. Ask to speak to vendors.

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Close on the property. Immediately list vacancies on CL, FB & Zillow. Meet all the tenants in the evening. Shake their hands. Tell them you want their experience to be amazing & you want them to stay. Give them your number. Ask what can be fixed. If fixes are cheap, do them ASAP.

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Tell that tenant once fixes are made. Address them by name. Clean up the park. Hire a tree guy to clear out low hanging branches. Do some simple landscaping. Fix potholes and drainage issues. ADD VALUE. Show you care. Wait a couple months before making any changes.

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Once rents are raised and park is stabilized, you are 6-9 months in. Search Loopnet for most active MHP brokers. Hire the best one & pay what he commands. Sell on the market for 7-10% cap. You've just 2-3x'ed your money. Rinse & repeat. No course or substack.

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Hope you enjoyed!

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