11 empty pads on a 46-lot park. Filling them is either the whole return or the whole risk

Before you spend a dollar on homes, confirm the 11 pads are still legally usable. Some ordinances treat a pad vacant beyond a stated period as an abandoned use, and you can find yourself needing a permit to re-set a home where one obviously stood in 2011. That varies by state and by ordinance, and I've seen a county planner decide it on the spot. Get it in writing before you order anything.

If they're clean, the free option version isn't lazy. Vacant pads with utilities in place don't cost you much to hold.

Fill two a year out of cash flow and stop trying to solve it at closing. I've owned land long enough to be suspicious of anything that requires me to deploy 60 percent of the purchase price in the first eighteen months. Patience costs you nothing here because the pads don't expire, assuming parcel's point checks out.

Questions before I could pick. What's the actual demand evidence, meaning how many calls a month does the current owner get from people looking for a lot. Is there a dealer within reasonable distance willing to place homes there. And what did the last three homes that moved into the park arrive as, a resident buying their own or the owner bringing one in. Those three answers change which option is even available.

Something I'd chase, flint: whether local retailers will send buyers your way. In some markets the dealers effectively decide which parks fill, because a buyer walks in wanting a home and asks where to put it. A park with an ugly entrance and no relationship with the two nearest dealers stays at 35 lots no matter what the pro forma says.

The math I'd want written down is payback per pad. At $340 a month you collect about $4,100 a year gross, call it $2,600 after your share of expenses. A $32k used home is roughly a twelve-year payback on lot rent alone, and that's why nobody funds infill with lot rent. It only works if the home itself either sells or rents.

Naive question from outside. Who does the moving and setting, and is that a business with any capacity in most markets. If the transporters are booked eight weeks out then the pace of infill isn't a capital decision at all.

Reading arbor's payback number is the most useful thing I've seen this week. I'd been sketching a small park with vacant pads as upside and treating the homes as an afterthought. They're the bigger check than the park.

If you rent the used homes you're screening tenants for a dwelling, which is a different exercise than screening someone who owns the house and is renting your dirt. Different eviction path too, and the timelines differ by state. That alone would push me toward selling rather than renting.

The version of this I'd want to own is 35 occupied lots priced at 35 occupied lots, with the 11 pads costing me nothing and doing nothing. If the 11 are free the deal doesn't need them, and if the deal needs them I don't want the deal.

I had to reread this twice. So in the sell-on-a-note version, the resident owns the home and pays you both a home payment and the $340 lot rent, and eventually just the lot rent once the home is paid off. And in the park-owned rental version you own the house and one payment covers everything. That's the distinction, yes.

juniper, that's it, and the reason operators prefer the first one is that a resident who owns their home fixes their own water heater and doesn't leave. The reason it's harder is the paperwork around originating those notes, which is exactly the part flint says two attorneys disagreed about.

flint, is the seller willing to hold back part of the price against the vacant pads, or price at 35 lots and take a small share of infill later. That converts your risk into his patience.

Having owned dwellings, I'd avoid the park-owned rental route unless you plan to sell them off within a couple of years. Eleven old single-wides with 1990s plumbing will hand you the exact expense ratio the chapter says this asset class avoids. Roughly a third of my apartment expenses are things you'd be volunteering for.

Every 40-something lot park on my list has vacant pads, which makes me think the vacancy is the market's opinion rather than the seller's neglect. Worth finding out whether the last owner tried to fill them and failed.