Welcome back to the Passive Mobile Home Park Investing Podcast, hosted by Andrew Keel. In this episode, Andrew takes you through 10 common due diligence mistakes that newcomers often make when entering the mobile home park investing space. With his extensive experience, Andrew Keel breaks down each pitfall, offering valuable insights and practical advice on how to avoid them.
Here are the 10 mistakes to watch out for:
- Failing to Obtain a Mobile Home Park Zoning Certificate: Before buying a mobile home park that requires infill, securing a zoning certificate with setback requirements is crucial.
- Overlooking the Property Tax Increase: Be prepared for the property tax increase that often comes in the second year after your purchase. Re-assessing the property to the new purchase price from the sale.
- Opting for a Mobile Home Park Boundary Survey Instead of an ALTA Survey: An ALTA survey provides more comprehensive information, which is essential for accurate due diligence.
- Neglecting to Review a Full Year of the Mobile Home Park’s Utility Bills: Ensure you examine 12 months of water and sewer utility bills and usage data to avoid surprises.
- Skipping the Phase One Environmental Inspection: This inspection is vital to uncover any potential environmental risks before purchasing.
- Failing to Inspect Behind Mobile Homes: Don’t skip physically walking behind the mobile homes; it’s key to understanding the true condition of the property.
- Failing to Inspect Inside Park-Owned Mobile Homes: Thoroughly inspecting the interiors of mobile homes is essential for uncovering hidden issues.
- Overlooking Park-Owned Mobile Home Lost Title Costs: Account for the expenses related to obtaining and managing titles for park-owned homes.
- Neglecting to Discuss Responsibilities with the Power Company Engineer: A clear discussion with the power company engineer can prevent costly misunderstandings down the line.
- Skipping a Review of the Mobile Home Park’s Google Reviews: Reading the Google My Business reviews for the mobile home park can reveal important red flags.
Tune in now to discover why thorough due diligence is crucial for making informed decisions, reducing risk, and protecting your mobile home park investments. By dedicating time and resources to this pre-purchase due diligence process, you’ll be more likely to secure a sound and profitable mobile home park investment for the long term.
***Andrew Keel and Keel Team Real Estate Investments (Keel Team, LLC) do not endorse any interviewee. This interview is for informational purposes only and should not be depended upon for investment purposes. ***
Andrew Keel is the owner of Keel Team, LLC, a Top 100 Owner of Manufactured Housing Communities with over 3,000 lots under management. His team currently manages over 40 manufactured housing communities across more than 10 states. His expertise is in turning around under-managed manufactured housing communities by utilizing proven systems to maximize the occupancy while reducing operating costs. He specializes in bringing in homes to fill vacant lots, implementing utility bill back programs, and improving overall management and operating efficiencies, all of which significantly boost the asset value and net operating income of the communities. Check out KeelTeam.com to learn more.
Andrew has been featured on some of the Top Podcasts in the manufactured housing space, click here to listen to his most recent interviews: https://www.keelteam.com/podcast-links. In order to successfully implement his management strategy, Andrew’s team usually moves on location during the first several months of ownership. Find out more about Andrew’s story at AndrewKeel.com.
Book a 1 on 1 consultation with Andrew Keel to discuss:
- A deal review
- Due diligence questions
- How to raise capital from investors
- Mistakes to avoid, and more!
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Talking Points:
00:21 - Welcome to the Passive Mobile Home Park Investing Podcast
00:35 - Failing to Obtain a Mobile Home Park Zoning Certificate
03:22 - Overlooking the Property Tax Increase
07:15 - Opting for a Mobile Home Park Boundary Survey Instead of an ALTA Survey
10:55 - Neglecting to Review a Full Year of the Mobile Home Park’s Utility Bills
15:30 - Skipping the Phase One Environmental Inspection
18:45 - Failing to Inspect Behind the Mobile Homes
20:05 - Failing to Inspect Inside Park-Owned Mobile Homes
21:32 - Overlooking Park-Owned Mobile Home Lost Title Costs
23:06 - Neglecting to Discuss Responsibilities with the Power Company Engineer
26:04 - Not Reviewing the Mobile Home Park’s Google Reviews before purchase
28:18 - Conclusion
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Links & Mentions from This Episode:
Keel Team’s official website: https://www.keelteam.com/
Andrew Keel’s official website: https://www.andrewkeel.com/
Andrew Keel LinkedIn: https://www.linkedin.com/in/andrewkeel
Andrew Keel Facebook page: https://www.facebook.com/PassiveMHPinvestingPodcast
Andrew Keel Instagram page: https://www.instagram.com/passivemhpinvesting/
Twitter: @MHPinvestors
Quotes:
“Property taxes year after year will likely go up.” - Andrew Keel
“When I would go to refi and use an agency lender, they would require an ALTA survey be done.” - Andrew Keel
“Talk to the tenants. Walk through the parks before you buy the parks and say, ‘Hey, how have the water and sewer utilities been here?’” - Andrew Keel
“You want to know what you're getting into, and it's really hard to see if you don't get out of your car and walk behind the mobile homes.” - Andrew Keel
Passive Mobile Home Park Investing