Mobile Home Park, Deal Or Not?

[Tommy Vise]

I have an owner who is looking to get out of her Mobile Home Park.

She has NO Rent Roll or contracts that the tenants are on, just month to month agreements.  Let me give you the numbers:

19 Lots

17 Occupied 

7 park owned homes

$100 per month per trailer = $1000

7 park owned = $2650

Total of $3650

Mobile Homes are in OK condition, could use a little work but none is too bad.

All tenants pay for water, gas, electricity, sewage.

The road through the park is paved and I have to keep it up.  

Each is individually metered.  

Asking price is $210k for the whole thing.  

NOI= 3650 x 12 x .7= $30,660

NOI/Sales Price = $30,660/210,000

Cap Rate =14.6%

Positive things with this park:

1.  The lot rent is low.  Can be increased immediately.

2.  There is a vacant trailer in the park that needs about 2k in work that can be bought for 3k.

3.  The mobile home park can be made much nicer with some improvements, painting of MH, upkeep of the road.

4. Near the river.   About a mile to the nearest boat dock. 

Negatives:

1.  Older septic systems

2.  Road is getting bad, needs work--10k Maybe??

Is this a good deal??? Any suggestions?  

Thanks for letting me know.

Tommy