So, you want to start investing in a mobile homes within the greater Sarasota Florida area?
In this first installment of “Sarasota Florida Mobile Home Investor Alerts” we look to discuss the importance of educating all would be investors on the importance of knowing how many homes a single investor can purchase in any one park.
With the rise of real estate investors leaving the traditional confines of single family and traditional residential homes for investing purposes due to continually being out priced by other would be investors we are seeing a large influx in these Buyers in the mobile home industry.
While this is exciting to see, we continue to find these new mobile home investors putting the cart before the horse and not understanding the basics of what is needed on their part in order to begin their investing career in the mobile home park business.
We, at The Mobile Home Dealer, hope that this series of blogs helps all new investors as well as some of the more experienced ones in the area to better educate them on now only the basics of the industry but also the continued trends we are seeing within the mobile home park business as a whole.
The topic for this blog post is to discuss the importance of knowing what park you are going to invest in and how many homes one single investor is able to purchase within that park.
When looking at investing in a mobile home park within the greater Sarasota Florida area it is always important for the new investor to understand what the requirements of the park are in regards to how many homes they can own.
Most parks will state this in a document known as the mobile home park prospectus. This is a lengthy document that nearly all mobile home park will have which goes through all of the dos and don’ts of the park.
It is not uncommon to see a limit on the homes that can be owned by any one single person in a community.
To illustrate this, here is an example:
Let’s say for this example there are 100 total mobile homes in the park. Let’s further assume that there is no limit as to how many homes one person can own in that particular mobile home park. With no limits put on any one Buyer lets say an individual comes through and purchases 51 homes out of the 100 available and uses these as rentals to other park approved residents.
Let’s further assume that the Buyer who owns the 51 homes receives a notification from the park owner that states the rent is going up on January 1 of the following year. If the Buyer who owns the 51 homes does not want to pay this additional amount of money they could threaten the park that if they do not keep the rent the same they will move all 51 homes out of the park to a neighboring park.
If the Buyer were to do this and move all of their homes out of the park this could very well cripple the park business for the park owner as more than 50% of their entire revenue is leaving. If the park owner does not increase the rent and the Buyer stays then they will be running their business with a large concern that at any point in time one person could decide to turn their entire business upside down.
Although this is an extreme example, we feel this best illustrates the basic reason as to why there are limits put on any one Buyer in a mobile home park, to not give any one person more control then the park owner has.
While we see the common number being any where between 1-3 homes in a mobile home park that can be owned by a single person there are still a few parks in the greater Sarasota Florida area that have a larger number, some as large as 10 homes!
When starting your mobile home investing business always make sure you are aware of how many homes you are able to own within a single park so that are operating well within the mobile home parks rules and regulations further creating a good relationship between you, your renters and the park management.
This is Mark Kaiser with The Mobile Home Dealer and we help mobile home Buyers and Sellers get to a better place in life.