Hello,
We are considering purchasing a parcel of 15 acres in Tennessee. Does anyone have experience in developing a property like this for a mobile home park?
Could you give us some idea of the cost involved. This land is flat, and soft rolling, with some trees. Water would be supplied by a private source, and we would be paying for it, since they would only install a single master meter. We can either make the roads black top or keep them gravel.
Another concern we have is the economy .............. How hard would it be to fill the park. We want to rent the lots, to single wide owners, and are thinking at starting lot rent of $175.00 per month.
Any information provided would be very much appreciated !!
Ralph

Hello Ralph -

The challenges developing a park will differ from location to location depending on the building zoning and planning codes. Here in Florida I developed a park back in the 1980's and it was simple and relatively inexpensive. Since that time the codes have been changed and it is now very expensive and could take years to get the necessary approvals. Unless you are developing 150 plus spaces it is economically unfeasible

Start by visiting your local zoning and building departments and finding out if there are any code barriers that you might have to overcome.

Then set up an informal meetings with a local engineering firms, see if you can find one that has experience with mobile home parks. Just about every jurisdiction in the country will have minimum building and health codes that you will be bound by. Ask the engineers to give you an itemized estimate on what it will cost for them to draw up the necessary plans and obtain approvals from the local authorities.

You will probably want to ask 3 or four firms for estimates to be sure you are getting a fair price. A fair price is seldom the lowest price. Most of the time when you request bids you well find that most of the bidders are around the same price. Watch out for the ones that are way higher or lower that the rest. The high bid usually is testing the waters to see how much you can be squeezed for. The lowest will generally hit you with extra charges before the end of the game, because he wont be able to do a quality job at a price way below the others.

Use that itemization to get estimates from contactors and/or utility companies you will need for the development. (site work, water, sewer, roads, electric, cable, etc). Again the more bids you gather the better you will understand the local market for those services You can use a general contactors that can take care of the entire project and give out sub-contracts for the portion of your project. I have always preferred to be my own general contractor and bid out and supervise each phase of the project myself. If you have no experience in construction you may do better with an experienced general contractor or a professional project manager who understands exactly what is required to accomplish each phase.

The preliminarily bids will give you a reasonable estimate as to your total costs. (I add ten percent to cover omissions and cost over runs to be safe) Once you have your engineer plans finished and approved, submit them to these same contractors for a final bid and get the engineers to help you set up a time table of jobs.

Dont be afraid to discuss each contractors bids with you engineers of choice. They will probably have experience with the local contractors and know their quality of work and reliability. Often reliability is more important than price.

Any construction project will have a time table. There is an order in which jobs need to be accomplished. For example you dont want to finish your roads before you run your utility lines as you will no doubt find the utility contractors will have to cut thru you new roads or tunnel under them to lay their lines. Either alternative is unacceptable as there is no way you want to cut even gravel roads you have just paid to compact and finished and tunneling under becomes a much more expensive than trenching and burying.

Consider the alternative of individual water meters at each site, even if you have to install your own sub-meters. Over the years the ever rising cost of water can have a horrid effect on your bottom line and your customer relations. Your interest is in collecting space rent. As the cost of water goes up... and it will... you will have to pass that cost along to your tenants. It will be difficult enough protecting your profit in times of rising costs. Let the water company take the heat for their steady billing increases, so you can grin and gripe along with your space renters.

As far as filling the park the strategies you use will depend on location and economic conditions. At this exact time it is difficult filling vacant spaces in almost any market across the country. In my area there are so many vacant new homes that prices have plunged and park operators simply can not fill vacancies. I am confident that as the economy recovers this will change. Contact your state manufactured housing association. Most state associations are dominated by park owners who pool ideas and experiences to improve their business.

Tennessee Manufactured Housing Association
[www.tnmha.net]
604 4th Ave N
Nashville, TN 37219-1102
Phone (615) 256-4733

Also see "Park Vacancy Problems Can Be Fixed With These Creative Steps" at [mobilehomenews.com]


Take a look at the classic books Development, Marketing and Operations of Manufactured Home Communities These book draws upon the expertise of many of the industry’s most knowledgeable individuals and addresses the land development and initial operation of manufactured home rental and subdivision communities in the U.S. and Canadian markets.Designed for the professional as well as the engineering student and would-be developer, this easy-to-follow guide takes you from an introduction to the manufactured housing industry through the steps of successful sales and leasing.

You might also want to subscribe to MHWeekly the free weekly newsletter aimed and mobile home business participants. They include weekly articles on park investing and management. You can search thru their archive of articles using the search field on the right side of their home page.

Good Luck... come back here and let us know how you progress

David Oxhandler
mailto:webmaster@mobilehome.com



Edited 2 time(s). Last edit at 09/12/2009 11:20PM by admin.