Trailer Parks

We checked out one a while back & ran away...the tenants were always late or never paid the rent, so all you'll get is 1st month/1 security & then
have to evict. Also trailer repairs are a pain & here they are titled as vehicles, so the value just deprecates.

It sounds like this guy has made a bad name for himself with only 10 tenants. Good time for a lowball offer. You might want to research an appraiser that specializes in Mobile home parks

You could check and see what the property assessor has valued the land the trailer park sits on. Then you can put a price on each individual trailer (which won't be much at all). Show the owner that the land is only valued at $xxxxx and each trailer is only worth xxxxx. Make him an offer based off the value. Of make him an owner finance deal and do a sandwich lease on each individual trailer.

Those old trailers aren't worth hardly anything. BUT they are worth a fortune and like little ATM's spitting out cash each month if people are acutally able to BUY the home from you. That also eliminates you having to put up with fixing mobile home problems. IF they are buying it becomes their responsibility.

If you can do an owner finance on each trailer that would be worthwhile. Require the prospective buyer to put down say $2000 and pay $300 per month for xxx years. Be sure to add interest since you are owner financing.

You could either just sell the trailer or do a land package deal on each trailer. Most likely they will mess up and you will evict (foreclose) and start all over having a new prospective owner to put down $2k and $300 = $2300 per mobile home.

That kinda gives you a little to think about.

A quick rule of thumb on value for any income producing property is 5 - 7 times the gross income. If they have kept bad books, then the park is just that much more attractive to purchase on terms! This is a quick look as to value. You further evaluate the situation of course looking at the net to see if there are things that you can change or add value as all others are advising towards. I am glad to see that some have decided to talk about the negative aspect as well. I am invested in a trailer park and moving towards others. You must be careful when investing! I hope that this information helps!

It is not always bad tenants as much as it is bad management. Who let these people in and how well does he collect rents? Does he let them slide or does he give them the notice and act right away on his threats? What are the landlord tenant laws for that area? If the judges lean toward the tenant then it will be harder to evict them, so that should be considered. I believe any situation can be rectified with research and a plan.

I would look at the current net income and have a cap rate that you need maybe 10 or higher and that is your purchase price.

I would also look to see what the potential really could be in the current market by looking at surrounding parks that are similar to this one and or have similar tenants as this one. I would see how they are currently operating to see if there really is upward potential in this property.

Dawn is SO insightful! She is dead on with the additional points on the trailer park. You can NEVER do enough due dilligence! Be careful not to over analyse a situation. Over analysis generally leads to paralysis in real estate investing. Many times I will have to sleep on a decision. Never be over anxious on a deal! This generally leads to over payment! Be prepared to NEVER exceed your maximum offers! Trailer parks are very interesting and you can make a lot of money with them! HAVE FUN - BE CREATIVE!