How do I build a MH park?

General Real Estate Investing
1

Hello Everyone,

I’m interested in building a mobile home park here in Virginia. The kind of park I have in mind when completed would be a slightly upscale senior citizen community of maybe 12-40+ SWMHs. All new units commanding high rents. I’m thinking of starting off with maybe 4 units then growing that out over time.

Yesterday I spoke with a representative from OakwoodHomes.com to get some information on their models/prices etc. She stated that the type of units I was interested in (3BR/2BA) take about 4 weeks for delivery and will cost “in the 30s”. So, I’m going to assume “in the 30s” means $39,999 each which includes setup & delivery.

The land I’m interested in developing for this purpose is currently zoned agricultural and approximately 24 acres in size. Electricity does come to the property now (to an old farm house) but I was thinking of having this split up individually to each MH pad utilizing seperate meters. Since there is no public water/sewer service nearby, I would have to install the appropriate number of wells & septic tanks to serve the units.

When the units have been installed I plan on hiring a caretaker to collect the rents and manage the grounds. That person will also receive a discounted rent allowance for their unit.

I’m planning on ordering Lonnie Scruggs two books on MH parks.

Now onto the questions at hand…

  1. Obviously I do not want to buy the land if I cannot use it the way I want…so, is there a way I can write the land offer subject to the approval of county officials rezoning the property to allow for a MH park?

  2. What would be the best way to provide water & septic service to each pad? Do I need a seperate septic tank installed for each or can I run multiple into one tank?

  3. If you were interested in taking on a challenge of this magnitude, what would be the best way of financing this effort?

  4. Lastly, are there any major issues or concerns that I’m overlooking that could cause me considerable pain and anguish down the road?

Thank you in advance for any help or advice you can give!

-KeithInVA

2

I’ve done some more digging on this site as well as other places on the Internet and found another alternative.

If I purchase the property and set it up with the necessary wells, septic system, and concrete slabs…I should be able to relist the property on the market as a trailerpark and sell it for a nice profit. Assuming; the property can be rezoned, all the numbers fall into place, and a new Buyer can be located. I guess another option would be to build upon this idea and populate the park with a few late model SWMHs that are in good shape and get them rented out.

With so many options to choose from I suppose my first step is to contact the local authorities and feel them out about the idea before I spend any money.

-KeithInVa

3

I would have to agree, you will need to contact your local officals and see if you will be able to convert the property to a MH park. Another thing is, I highly suggest Lonnie’s books but you won’t find anything in them about starting a MH park. I have the same idea in Georgia, but what I want to do is buy a place approximately 4.5 acres and already has one MH on it. I would divide the land up into .25 to .5 acre lots and move some MH’s in. I to have the same questions about the number of well and septics. But from what I have learned so far, I would definetly put seprate meter boxes for the electricity.

4

You’re on track with the idea of contacting the local officials. Study the zoning book and procedures, timelines, fee schedules, etc. about the municipality’s zoning and try to get a feel of how hard/easy it would be to rezone the land. It’s good that you are keeping your initial options open and entertaining the idea of flipping the property. That would make great financial sense, especially if the market is able to pay well for an improved/approved mobile home park.

Now to try to answer some of your questions.

Question 1: Of course you can write your offer and/or sales agreement with a contigency for approvals/rezoning. But, it obviously would make the offer less appealing to the seller to have to wait for your approvals. Some municipalities will draw out the process of apporvals or rezoning; making you and the seller wait for several months.

Question 2: I’m not quite sure on this question, that would have to be talked over with an engineer or someone who would do the work for you. I wouldn’t see why you couldn’t run a few systems into one, but remember someone has to pay to empty it.

Question 3: Depending on the price of land and the amount of improvements you’ll be doing on the property, there may be several ways to finance this. If you know anyone in the banking/mortgage industry, I’d give them a call. I’m not sure if you’d be able to get a construction loan and if it would even be necessary.

Question 4: Just make sure you do your homework outside of the box. It’s good that you are researching the mobile home industry, but remember the market you are in as well. Compare like facilities in the area and research their values. Study the demographics and try to correlate them with the type of demographic you are targeting. Are you building an age restricted community? Are there nearby attractions which would lure in this age group?

Also, depending on how much experience you have with development and this particular piece of land, there will be your usual red flags to look out for such as: wetlands, floodplains, soil types, perc test results (esp. for septic systems), etc. If you’ll be putting in impervious cartways, you may need stormwater management. Just a few basic concerns.

I hope this was of some help to you and I wish you good luck with this project and future endeavors.

5

If all else fails is it economically viable to rezone as residential and subdivide for home building lots? Maybe that might be a backup if the town fails to approve it being rezoned for a MH park.

6

horsetrder, Very nice overview, thanks.
I think you can write stories or articles :stuck_out_tongue:
Haven’t you ever tried?

7

Keith:

I would seriously reconsider trying to build your own park. Getting that property re-zoned is going to be extremely difficult. Even small town government officials are shying away from adding additional parks to their cities.

Furthermore, unless you have owned a mobile home park before, you will probably greatly under estimate the required capital to accomplish this. Personally, I would focus on trying to purchase an underperforming mobile home park in your area using an very high cap rate.

However, if you are dedicated to moving forward with your development plans…I would look at purchasing used, repossessed mobile homes as opposed to the 40K ones you’re currently looking at. You can pick up a decent S.W. for less than 10K if you look around and you can rehab it for around 3-5K.

Good luck to you.

8

But you don`t consider all factors that influence in price!!!
You should pay a less if you take into supply, competishion etc…

9

Does a mhp have to be zoned residential or commercial?
;D

10

LOL ;D