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The couple owns a 24 space mobile home park. They are all older mobile homes which they rent out. 50% are occupied/rented and 50% are empty. Some are small 1 bedroom homes and some are 2 bedroom homes.
Their park is in a beautiful setting with a river next to the part and surrounded by mountain views.
They want to sell all 24 mobile homes and want them removed from the park so they can build their dream home on the property.
Getting top dollar for the homes is less important than getting them off the property quickly. They have not named a price.
What would you do?
Jackie,
These are great – please continue these type of posts.
A few thoughts on this…
If I owned a MHP nearby, I’d buy them (cash or terms) and move them to MY park if they were in moveable/usable condition. Then I’d sell them to my tenants for what I have in them. The one thing I don’t want is to maintain used MH’s. The costs will eat you alive. How did I learn THAT lesson?
At the end of the day, I want to increase the revenue in my park as efficiently as possible.
Let’s say 24 homes would have lot rent of $400/month. I just increased the revenue of MY park by 24 * 400 * 12 = $115,200. If we subtract 40% for expenses, that leaves $69,120. At an 8 CAP that means my park is now worth $864,000 more.
At $450 per month lot rent — using the same formula, the value of MY park is now valued at $972,000 more.
Otherwise, I’d option ALL of them (again, cash or terms) and have them moved out ASAP so the owners can start on their dream home. Maybe sell them to a local park owner(s) so they could do as I described.
Hope I didn’t miss the point on this one,
Mike Weiss
Prescott, AZ
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