How to Invest in Mobile Home Parks
Mobile home parks may not be the most spectacular investment as real estate properties go, but they can represent an important part of an individual investor's portfolio. Fairly inexpensive mobile home park properties can often be located within a few miles of your current residence if you have the diligence to look around. If you cannot purchase an entire property, talk to the current mobile home park owner to discuss drafting an agreement for a percentage share of the park.
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Instructions
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Identify mobile homes currently holding tenants in your area. Residing nearby your investment allows you to keep a close eye on it, especially important for real estate. Drive around neighboring communities, speak to local Chambers of Commerce or use online databases, such as MobileHomeParkStore.com, to identify previously unknown mobile home parks.
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Visit the mobile home park in person and ask to speak to a manager. Ask the manager if there are any parties with an investment share in the mobile home park that are interested in selling that share. You may also find, in the case of mobile home parks owned by a single owner, that the owner might be interested in an investment partner to raise capital. Most small to medium-size mobile home parks have a single owner.
If the manager says that no investment opportunities exist at that mobile home park, take his business card and leave your contact information as well, if possible. If an investor wants to drop out of the mobile home park business, it's possible that the manager or owner will remember your name and call you about the opportunity.
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Negotiate the terms of your mobile home park investment with the current owner. Unless you are completely buying out the owner or investor, talk about the percentage of the mobile home park that you will profit from. You might decide to take a profit percentage share, such as 50 percent of total profits, and share responsibility for maintenance on the entire park. Alternatively, you might split up the park into individual lots and be responsible and profit from those that you own.
When negotiating the terms of the investment, keep in mind that you should hire a manager to live in one of your lots, if you plan to live off-site.
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Write up a real estate purchase contract or investment contract that outlines the terms of your investment, how much actual property you will own, what maintenance responsibilities you have and information regarding how profits will be split up. Have an investment attorney look over the contact to ensure that you will receive the investment share that was agreed upon.
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Invest in extra space or buildings that will increase your original investment and produce higher returns. Extra rental lots can increase your income by a few hundred dollars per month. Investing in park beautification and fixtures such as lampposts or road signs can boost your park's appearance, allowing you to charge more.
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Tips & Warnings
Don't be afraid to shop around when looking for mobile home park investment opportunities. Park owners who are looking to get out of their investment may have to pay thousands per mobile home to clear their lots. If you calculate that you can take on the extra debt burden, you may be able to negotiate a very cheap price for the mobile home park property.
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