First Mobile Home Park Under Contact

[Rich Ferradino]

I just put a 10 pad MHP on contract in South San Antonio. There are 9 Mobile Homes which are mostly 1990s, and only 4 are currently rented for a total of $2650/mo, 3 vacant,
the remaining 2 need to be repaired, and the last pad is vacant. 3.4 Acres, city water (master meter), septic tank, and individual electric.

The deal financing was $200k, $30k down, 6% interest, for 10 years.

I know the unofficial formula is lot rent x # of units x 12 x .6(owner pays utilities) or .7(tenant pays utilities) x10 (CAP). then you add in the wholesale price of the mobile homes to get to your price

We are planning on renting the land and home as a package deal. Market rents are $800/mo for 3 bed and $700 for 2 bed. With the park being fully rented, we can cashflow $50k/year including the mortgage.

The park has space to expand to 2 more spaces, but I have to check with the county to see if the existing septic will suffice. Thoughts?