Of all the questions I receive from investors that are looking to purchase a mobile home park there are two questions that are asked most often:

How do I find a mobile home park deal that makes sense?

How do I place a value on that mobile home park?

These are important questions and there are several ways to find mobile home park investments and even more ways that one can approach evaluation of that investment. When I first started in the business about 12 years ago, I spent a lot of money driving across the country looking at listings I found in major newspapers and on the internet. While this allowed me to see a lot of potential deals, it was a big waste of time and money. Many times I would get in my car and drive 1,000 miles only to find that the park I was looking at was a complete dump, had unrealistic profit and loss projections, or was already under contract by another investor.

I soon realized that it was worthwhile to do a more thorough analysis before visiting the property. If it passed the initial analysis, then I would try to get an accepted offer and request detailed financials from the seller. If it still looked good I would schedule a trip to visit the park. Before implementing this strategy, I was visiting about ten parks for every one I purchased. Now, that ratio is more like two-to-one and I am not on the road all the time.

If the mobile home park looks good on paper, get it under contract before spending $1,000.00 in travel and two days to visit it!

In order to find a mobile home park that makes sense financially the most important part is to be able to quickly identify and separate the good deals from the bad. The only way to acquire this skill is to educate yourself on this business (through books and other resources) and start looking at as many mobile home park offerings as you can. With the availability of information on the internet you can accomplish this task quickly. Go to MHPS.com and other internet websites such as Loopnet.com where you can view over a thousand mobile home parks for sale.

Whether you are a new or seasoned investor in this asset class I would suggest getting the information on as many properties as you can and then put them side-by-side and analyze each one. You will get an idea of the capitalization rates, expense ratios, occupancy levels, and rental rates for different markets. You will find prices all over the place but if you invest the time and effort in evaluating deals, you will start to develop an idea of what to look for in terms of price-per-space, how park-owned homes affect values and other important factors.

Invest the time in evaluating as many deals as possible and invest the money on properly educating yourself on the business so that you can separate the good deals from the bad and concentrate on those with promise!

So where is the best place to find a mobile home park to buy? The best answer to this question is that you should try as many logical approaches as possible. As mentioned above, I would suggest you start by checking out the websites that have thousands of mobile home parks for sale like MHPS.com and other commercial real estate sites such as Loopnet.com. There are new parks listed daily on these sites and the best way to utilize these services is to sign up for notification of new properties for sale. This way you have a better chance of jumping on the good deals before they are available to the general public.

I have purchased over 50 mobile home parks over the past 12 years and about 15 of those purchases came as a direct result of listings on the internet.

The next strategy that I would suggest is to start a direct mail campaign to mobile home parks that are in the markets and states that you are interested in. This has accounted for about 20 of my 50 mobile home park purchases. If you obtain a good list of addresses, you can target mobile home parks with a certain number of spaces in select markets expressing your interest in purchasing a mobile home park.

I have experimented with postcards, letters, and even actual purchase contracts and have found that the response is about the same for each of these. The key has not been in the type of piece but in the frequency of mailing. I have received many calls from mobile home park owners saying that they have received our numerous mailings over the years and are giving us first shot at the park since they know we are a legitimate company. I actually had one seller pull out a file included over 25 mailings from us. In another instance I mailed out 1,000 letters to two states expressing our interest in buying mobile home parks. I followed this up about 2 weeks later with the same mailing piece (in error) and found that my response rate was about 100% higher from the second mailing. So the key with direct mail is in getting a good list to mail to and frequency.

There are several other options that I have used with varying degrees of success. I have listed some of these below.

Driving through mobile home parks in markets you are interested in and talking with the onsite manager/owner or following up with cold calls or letters to parks that you would be interested in owning. The advantage of this method is that you see the park before you start any communication with the owner and it will give the owner a level of comfort dealing with someone that made the effort to see the park first. This works best with an owner that lives onsite and you can meet face-to-face. I have purchased several parks this way and there are many other parks I still have an open line of communication with the owner that I anticipate purchasing when they are ready to sell..

Making cold calls to parks in markets I am interested in. While this works best when the owner answers the phone, it can be very frustrating. I have been hung up on many times as have my employees. However, if you don't mind the frustrations, this is a viable method of finding potential deals. Besides being hung up on, the biggest frustration I have had is that you often get the response that anything is for sale at the right price (which is usually more than it is worth).

Another option is to stay in contact with real estate brokers that specialize in the sale of Mobile Home Parks. The key here is to stay in constant contact with these brokers in order to get a copy of all of their listings as soon as they receive them. Before they put the listings on the internet they will send out the information to the buyers they know are serious in hopes of making a quick sale. You want to be on that list so you get first shot at the good listings. Once you have a relationship with a broker and especially after you successfully close a transaction with them, they will know that you are a real buyer. I have one broker that I have purchased three parks from and he knows what I am looking for and contacts me anytime he gets something that fits those criteria.

Along with staying in contact with those brokers that specialize in mobile home parks and commercial real estate, you should contact brokers in those specific markets you are looking to buy parks. Many times these brokers will not have any idea about the internet sites that can help them sell the parks and otherwise do not understand how to value and market mobile home parks. While many times their listings will be grossly overpriced you will occasionally find those listings that are priced right or even better... under market.

Newspapers (online and offline), trade magazines, local and national MLS services, and other websites.

Country tax records, banks, appraisers, movers, dealers, and other industry professionals.

The key to locating good potential mobile home parks investments is to be diligent in your search and use whatever methods work best for you. The best deals are usually found by finding those parks that are the least advertised.

Once you find a potential mobile home park that looks a winner, the next step will be determining the value of that park. This will be the subject of my next article and will include a discussion on the methods I use in the evaluation of mobile home parks.

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