What's this park worth?

[Shaun Stephens]

I'm considering buying a mobile home park. It is in a great location between two small cities, 1 five minutes away and 1 ten minutes away. It's a relatively newer development built around 2000. And all homes are modern (vinyl, shingle). There are 34 acres plotted for 150 spaces and raw land value is 250k. All electric is 200 amp services and water sewer are municipal. 
33 spaces are rented

[Jeff Berlin]

basic and quick formula giving a tentative value would give a purchase price offer of about $465000 because the value in the park is the lot rents.  if you apply the cap rate to the annual income of $194 you will overpay for this property - and land value is insignificant unless you are buying in coastal communities for re-development.  you don't want to own the houses, might as well own an apartment complex if you are responsible for repair and maintenance on most of the homes.  mh investing in about owning land - reduce the expenses - park owned homes need to be converted to tenant owned.  could be a value add with all the empty lots but will require some capital to bring in homes and sell to tenants.  make sure there is a need for affordable housing in the location, what's the population? who are the major employers, median home prices in the area? rent for apartments comparable?  may be a reason its so vacant.  i wouldn't buy it based on the land value, you are purchasing a cashflow property - you are only concerned about the lot rents.