Mobile Home Park Analysis

[Tyler Miller]

Hi Everyone,

I am looking at a MH park deal. 21 Total Spaces, 4 of those are currently vacant. New spaces are renting for $200/month, but most of the tenants that have been there for years are paying $130/month. It is in a town with 31k Population and the park is right off a main road in the town, so very good location. Total lot is 2.2 acres. Room for at least 6 more spaces.

Asking price is 264k, but I believe I can get it for 230-240k. The owner is 70 years old and has had the park for about 30 years.

They are currently getting $2450/month for rents, but has the ability to gross $4200/month if fully rented out at the $200/month rent.

They state their expenses are:
$600/year insurance (seems low?) i calculated at $1200
$250/month expenses
500/year property taxes

Other notes: not too many trees on the property, short gravel road (other road is paved and city owned), and park has city water/sewer. I ran my numbers at 1% capex and 5% management. The park seems low maintenance and most of the tenants have been there long-term. 

For the current gross rents im getting a cashflow of $880.64 and if i rented all out at $200/month full capacity, $2525.64 cash flow. ($1685.64 cashflow with 20% vacancy)

This would be my first park, is there anything I seem to be missing? Seem like a good deal? Thanks in advance!

[John Arendsen]

I'd reach out to @Ken Rishel