Making More Than 2 Million in Two Years with Only One Mobile Home Park

Bought Mobile Home Park: $900,000

Invested: $840k

Sold Mobile Home Park: $3,950,000

Time Period: 2 Years

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Here's exactly how we did it.

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1. Finding the Deal

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Bigger Pockets forums (no affiliation)

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Started getting active there about MHP investing & someone in East TX reached out. He inherited the park & it was falling apart.

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Got lucky. 1st & only deal I've found from BP.

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Helps to be fishing in lots of ponds though!

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Property Overview

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Very unsexy MHP, but had a great location & came with 2 billboards.

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- Zero population growth 

- Big cannery in town

- Torn-up roads 

- 41/80 rented lots with homes, 39 empty pads

- $200 lot rent (way low)

- Paying an ineffective manager that we wouldn't need

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2. Identifying the Opportunity

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This was a location & value add play, pure and simple.

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Although the city wasn't growing, there were far fewer MHPs than the demographics called for.

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This park had by far the best location in the city. But no signage or website! 

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What a waste!

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3. Importance of Rents

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Not only did we call every MHP in the city for lot rent comps, but in every similarly sized East TX city as well.

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$350 was the answer across the board.

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The manager was living onsite & didn't want to raise rents.

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We weren't going to live onsite.

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4. Post Close

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Day 1 we sent a guy to meet every tenant.

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Gave them all our numbers + a 1-pager. Told them we'd fix the roads, and that was by far the biggest complaint.

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That cost $65k and it was done within a month.

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They were happy and impressed!

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5. Then we got to backfilling

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I talk about backfilling at the link here.

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What I didn't mention is that even existing tenants love backfilling.

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Empty pad sites are an eyesore.

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Good neighbors are a joy.

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We backfilled 4 at a time to GOOD tenants that we vetted.

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We kicked out 7 problem tenants.

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After 6 months the park was at 90% occupancy & was 100% better.

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We trimmed trees & added shrubbery.

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New tenants came in at $350 lot rent.

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The $200 lot rent tenants knew a raise was coming.

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2 people griped, and no one left.

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They had already seen the improvements we made.

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Signage and a website brought in a few more tenants by month 12.

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Occupancy was at 96% and more importantly, digital collections were 100%.

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No more walking the park to collect cash and checks.

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It was now cash flowing over $20k/month!

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6. Time to Stabilize

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Stabilizing a park means showing a strong history of collections and occupancy.

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This is what we did for months 13+.

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At month 18 we listed with a regional broker and it sold to an out-of-state all-cash buyer later that year.

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You can always find decent deals on Crexi & Loopnet...BUT with off-market deals, you enjoy;

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- Less pressure to close

- No broker headaches

- No competition 

- Better cap rates

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Once the off-market code is cracked, there's no going back.

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In the end, we took a property that;

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- Was an eyesore

- Had problem tenants & bad roads

- Was undercharging rent

- Was ignored by others

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And turned it into a property that;

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- Looked great

- Had strong tenants

- $264k NOI

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A win-win, and a healthy profit for us & our investors.