Trailer Park In Neb
I have a trailer park being offered for sale to me in western Nebraska.
70k, has 21 small trailers on it. It has been owned by a family for about 30 years the lot rent is only $400 a year, not a month but a year. Plus electricity and water. We own a place there now. It is near a lake about 60% of the owners only use their places during the summer.
I'm hesitant about looking any further into this because of my fears of getting stuck with something. All the trailers have strange septic systems, some trailers share systems, some have their own, needless to say they are all not up to current codes for septic systems. I'm fearful of buying the place and getting into trouble when these septic systems go bad and there is no way to replace them. The water would continue to be bought from the owner off his community wells.
$400 a year for lot rent is really under market. I just think the owners have never been inclinded to raise it very much and have never looked at the place as an investment.
I think something like $100 a month (1200 a year) would be doable. However, not sure how some of the owners would respond. Most of the trailers have been there since the 60's so I just can't imagine that they would be able to move too many of them.
Your thoughts on all this?
Check out the comps and then see what kind of deal the owner is willing to make. It sounds like there may be some potential in it. Are the lots big enough to put newer trailers on? Lots of things to consider. Will the current sewage systems be up to county standards. That could get expensive too...Let me know..Good luck
[ Edited by JoanAlyce1 on Date 12/23/2003 ]
My mother lives in a trailer park in Mesa which has a lot of 1960's, 70's trailers. The park keeps raising the rents. This has caused many of the winter visitors to just abandon the mobiles and stop coming to AZ for the winter as they cannot afford two places anymore and their children (baby boomers) have no intention of ever living in that sort of situation. (This also applies to the ones who have passed on)
My point is if this is just an occasional vacation spot and you raise the rents too high, you might end up with a lot of abandoned trailers.
Just a thought. Good Luck !
[addsig]
pejames - what comps? This is rural Nebraska. The lots are not big enough to move in modern trailers. There is no way you could put in modern up to code septic systems unless you would take out every other trailer. That is part of the issue for me, what would I be getting into when the septic systems go kabloey?
JoanAlyce - the rent is another issue, there a lot of older residents, I don't want to be the person to run them out of the only homes they can afford, but that is another issue in itself.
If someone abandons a trailer, can't you take it? What would you do? I would think that if you contacted them and told them to get it out since it is abandoned and they just ignored you that there would be some type of legal action where eventually you would own it?
With all the negatives coming up, I would personally pass this one up. The current crowd that rents, is getting to the point of no return, and when they pass on to bigger and better, it may be difficult to get someone else in there with the same size trailer and you would be praying all the time that nothing goes wrong. Not sure what the legal route would be for Nebraska, but you ar esurely looking at some interesting issues. Again, I would let this one go. Just my 2 cents worth.
Quote:
On 2003-12-22 14:47, The-Rehabinator wrote:
I have a trailer park being offered for sale to me in western Nebraska.
70k, has 21 small trailers on it. It has been owned by a family for about 30 years the lot rent is only $400 a year, not a month but a year. Plus electricity and water. We own a place there now. It is near a lake about 60% of the owners only use their places during the summer.
I'm hesitant about looking any further into this because of my fears of getting stuck with something. All the trailers have strange septic systems, some trailers share systems, some have their own, needless to say they are all not up to current codes for septic systems. I'm fearful of buying the place and getting into trouble when these septic systems go bad and there is no way to replace them. The water would continue to be bought from the owner off his community wells.
$400 a year for lot rent is really under market. I just think the owners have never been inclinded to raise it very much and have never looked at the place as an investment.
I think something like $100 a month (1200 a year) would be doable. However, not sure how some of the owners would respond. Most of the trailers have been there since the 60's so I just can't imagine that they would be able to move too many of them.
Your thoughts on all this?
Lot of questions, but could be a deal. First off, what is the price? Will it cashflow with current rent roll and your numbers? Have you talked with the public officials about the septics, and problems occuring with transfer of ownership? Is it possible to include the community wells in the purchase?
I would not raise rents too quickly unless you have the resouces to pay on a non performing asset. Too many not paying.As far as people moving, as old as these seem to be, there is no real threat of them being moved. The expense exceeds the value. If they stop paying, it is very simple, it isn't moved as long as there is a balance due. (check local law) Most will try to sell the home. I would approach them, and offer to take title in lieu of rent owed, and then rent them out myself. I'd want to own all the MH's. You never know, this could be a cash cow.
Good Luck,
Shawn(OH)