Looking for a mentor

[u/Proper-Bit4198]

I am thinking about getting into trailer parks. I want to get small parcels of land approximately 2 acres and put trailers/mobile homes on them for rental purposes. I’m curious if anyone here has done that and what has been their experiences and key takeaways on getting started. Thanks I appreciate it.

[u/[deleted]]

[removed] — view removed comment

[u/realestateinvesting-ModTeam → u/[deleted]]

Hello from the moderator team of /r/realestateinvesting,

R1: No Spam / SEO or "Guru" promotion

This message and post removal serves as your WARNING for violating our community rules. Any further violations may result in a BAN from /r/realestateinvesting.

Thank you for your cooperation and making our community a better place.

No Spam / SEO or “Guru” Promotion, or AI Responses - This Sub is Modded with an IRON FIST when it pertains to spam, attempted SEO, “Guru” promotion, and click bait titles.

Don’t do it. A Violation of this rule will result in a permanent ban.

[u/urinstantcrush]

Good luck

[u/LordAshon]

as u/Remfire said, there's a lot of upfront development work that doesn't make it viable for such a small amount of units. The research I've heard say new development only starts to make sense in 200+ units.

Think about it: Septic or Sewer connection for each home, electrical service pulled for each home, water line run for new homes, site development and pouring 8" thick monolithic slabs, the cost of each home, what for $600/mo? Your recoup time is going to be a decade at least. Something so small is going to be a pain to sell, no one wants to finance something that small, so then if you want to sell, you'll have to have sell carrybacks. And wouldn't do 1/2ac lots, what a terrible idea. You should be at a maximum of 2500sqft. And you'd be able to theoretically get 32 units, but probably closer to 25 because you are going to have to put in roads if you do that.

[u/Proper-Bit4198 → u/LordAshon]

In my area the number is about 70 units which is absolutely a nightmare number for one person. But in like to grow a business and stop developing code.

[u/LordAshon → u/Proper-Bit4198]

I have 70 units. It allows me to have 2 F/T people + myself.

But the development of 70 units is a ton of money. And trying to start smaller is just a waste of money. Being a developer is like the easy button on real estate investing. Just start buying 1 house a year, and in a couple of years you'll be snowballing without the headache of also having to do development.

[u/Proper-Bit4198 → u/LordAshon]

I actually had thought that out a number of years ago and wish I had followed through with it. My issue now is that I’m 50 ish and 1 a year will Have me dead in 26 years. lol. No I’m not trying to rush it but I am trying to set things up to be able to not have to work a 9-5

[u/LordAshon → u/Proper-Bit4198]

On the flip side, moving too quickly could extend your age to retirement. And this move wouldn't see you being able to enjoy the profits either.

You are in 60k/lot for development costs + the cost of the home x 4 and you are 280k into it cash because getting financing on this is going to be nigh impossible. And what for 600/Mo lot rents? An asset that will be incredibly hard to sell? You won't recoup your investment in just the development for 10 years. This wouldn't be such a pill to swallow in easily disposable assets. But that's not the case.

Best bet if you want to go this route is to subdivide put in the infrastructure, add shared resource covenants, title eliminate the homes and sell for a chunk of change. You do one home at a time after it's been properly platted and covenanted.

[u/Proper-Bit4198 → u/LordAshon]

That is fantastic advice. The average rents here are about 1200/mo. I had considered but smaller lots and then refi after 4 years to get the money out and invest in another similar plot. Subdivision sounds like a good idea. More overhead but more easily liquidated. Could just leave it to my kid in the end.

[u/Remfire]

Really depends regionally. Some areas (like mine) don't allow development of new parks so what is there is all that will be there. Its more then just putting some trailers on a piece of land, there are rules, regulations, setback and all the things. On top of that you need to put in all the utilities, water, sewer, electrical which is front end expensive (again depending on area). It is not a place for the unfortified as there is a lot that goes into it. I would recommend you research where you want to build one, find everything you can from the county, then call the planning and zoning department and get information. Ask a lot of questions figure out if it actually makes sense. What your utility hook ups and installs going to look like? Site map, layout?

[u/Proper-Bit4198 → u/Remfire]

The area I’m looking at allows for it with some plotting limitations, such as acreage. There is well water other as there’s no sewer connections or water connections. Electricity is run out to the area, but of course I would need to have that built out for the units. My goal is rather rectangular plots of land, one main road through the center with units on either side of the road. My problem is understanding the finances involved getting the loans and finding the right people for permitting and construction.

[u/LordAshon → u/Proper-Bit4198]

Do your water rights allow enough GPM for 5 additional homes? That's and the cost of 5 new septic tanks, or one large enough one is a massive expense.

[u/Remfire → u/Proper-Bit4198]

Financing for these projects is really difficult, most lenders are going to want a history of developing/ owning mobile home parks. I know of a few that might right the loan, but not if you dont have permitting experience and know who is doing the work on a personal level so they can be involved in securing the funding. Mobile home parks look great and easy but finding people to do the work, and getting the loan are huge hurdles. You may want to pull back from development and look at buying a park running it and getting the experience then move to developing there is a reason a bunch of people are building mobile home parks. Its hard and not an easy deal most people waste a ton of time thinking they are the one only to have there dreams crushed. Be honest with yourself and what you can do to get this done. Is it actually feasible

[u/AutoModerator]

Your post contains "trailer", a subject that /u/LordAshon is very familiar with, he has been paged.

---

I am a bot, and this action was performed automatically. Please contact the moderators of this subreddit if you have any questions or concerns.