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Updated over 1 year ago on . Most recent reply
Need Help with Off Market Mobile Home Park Assessment
I have an opportunity to purchase a mobile home park with 16 rented lots. The owner doesn't want to price the park. He wants me to give him an offer. I want to make sure I don't give him too low where he wouldn't want to deal with me.
| Current Revenue Info | |
| Rent | 150 |
| Units | 16 |
| Total Rents | $ 2,400.00 |
| Total Rents/Y | $ 28,800.00 |
| Expense Ration % | 30 |
| NOI | $ 20,160.00 |
| Monthly Mortgage Payment(Assumed) I am aware this can Vary | $ 1,500.00 |
| Yearly CashFlow | $ 2,160.00 |
The lot rents could be increased to $200 - $300. I am not sure if the expense ratio I am using is okay or not. The owner is paying for Trash $300 a month.
What would be the ideal cap rate I should look at when offering a price to the seller? Any other suggestion would be greatly appreciated.
| Future | |
| Rent | 200 |
| Units | 16 |
| Total Rents/M | $ 3,200.00 |
| Total Rents/Y | $ 38,400.00 |
| Expense Ration % | 30 |
| NOI | $ 26,880.00 |
| Monthly Mortgage Payment | $ 1,500.00 |
| Yearly CashFlow | $ 8,880.00 |
Most Popular Reply
Quote from @Logan M.:
What is the average cap rate in your area?
Based on your NOI and an 8% cap rate you would be around $336,000.
I don't think I would make a 'blind' offer on my future anticipated performa on the park. It would be based on the owner's current actuals with an explanation how you got to that number. Owner can always come back with another number. Never pay of 'ifs or buts and candy and nuts'. IMO. :)