New to the game

[Kevin Mehner]

Hello,

I am fairly new to real estate investing. I just purchased a 4-plex in Utah to get started. It felt good to finally take the plunge after much analysis. The Oklahoma market has always intrigued me because I grew up in Oklahoma and it seems relatively inexpensive to invest in Oklahoma compared to Utah where I've started to invest. My brother is a dentist and he still lives in Oklahoma and he and I are interested in buying some property here.

MHPs weren't on my investing radar initially, but my brother came across a mobile home that's only three miles from his dental practice that looks intriguing, but again I am new to this and any feedback that you could give would be greatly appreciated. As of right now I've contacted the agent and we walked around the property for some time and he has presented me with the financials he has been given. I will share those with you:

The land that the mobile home park sits is 40 acres, all of which is included in the sale. Currently there are 90 pedestals hooked up and ready to roll. Of those 90, there are currently 45 occupied spots. Those 45 are paying $180 a month to live there. There is also the potential for an additional 40  spots that can be developed. I mean there are 40 acres, so you could potentially put a ton of mobile homes on there, but there is a plan for at least 130 in the future total.

There is a park 15 miles away that is renting for $400 per spot but it also has paved roads and a pool.

The owner estimates expenses to be $15,650 per year($2350 in liability insurance, $4000 in repairs and maintenance, $5200 in trash, and $4100 in utilities)

That puts the NOI at $81,850 just at current capacity even though there is a ton of room to grow it seems.

There are three chlorinated wells and two regularly maintained lagoons

There is also a 1500 square foot house on the property that the manager lives in that I can most likely get included in the deal

In 2006 the place  appraised for $675,000

The asking price is $550,000 

The land, the house, and the MHP have been in the owner's possession forever but he currently lives out of state. The daughter of the owner is the one currently managing the park, but it seems like she doesn't run a tight ship at all and it is poorly managed. She doesn't market at all and just doesn't seem to have a good grip on things. She would be interested in staying, but I told the realtor that the house needs to be included that she manages from on the property and that I would need to get a new manager that I trust if we are going to do this deal. The owner is 72 and I think there is an awkward thing with his and his daughter who is a poor manager and he wants to wash his hands clean from this property.

The other issue is because of poor management and because it's always been a family affair, there hasn't been a good record of financials. Just another example of poor managing. 

I'm very interested in it, but would like some feedback on how to analyze this and determine if it's a good deal. Obviously the NOI looks good, but I just wan't to make sure I'm overly cautious. Thanks!