MHP Analysis Common Mistakes

[Brett Chupka]

Hi everyone, I only recently started looking into mobile home parks but I've found a deal that has not hit the market yet and it almost seems like it's too good to be true. It's also 10 minutes from the house I grew up in where I still have a ton of connections. 

My question is what are some common miscalculations that you've heard of or done yourself when analyzing a MHP? 

A little background, the park is 20 pads on well water and public sewer. There are 4 financed homes and 2 vacant pads. Numbers are okay as-is. The water and sewer are all baked into the rent right now which is a little below market from what I'm finding. If I metered each pad the property should run with a nice monthly cash flow. I'm finding somewhere near a 10 cap. 

I've got the operating costs from this past year. I don't think on-site management is necessary. The maintenance cost I ran at $12k/yr which I could see being more but doesn't seem like it is wildly off. What else should I be calculating for? 

Any insight would be really appreciated! Thanks. 

[Mario Dattilo]

Something this small will likely be running at about 50% expenses. Make sure you’re only valuing the cash flow from the lot rent and not home rent if any are rentals. Check out my profile for some more resources to help kick off your MHP investing. Hope this helps.