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Updated over 7 years ago,
Help evaluating park with high expenses
I am looking at making an offer on a park in the Southeast.
Median house value 120k
Median income 39500
Population 200k
Park age 1970
City water master metered. Owner pays water and trash
Gas and electric handled by city and submetered
45 lots
40 lot rent
1 free lot to manager and he makes 550 a month
3 park owned 1 vacant
2 lot only vacant
Lot rent at 160 but increasing to 185 soon
Park owned homes rent for 380-420
Paved roads
extra land to build possibly
2016
Gross last year was 80k and expenses were 70k= net of 10k
Expenses included 18k for utilities and almost 30k for repairs and maintenance of which 5k was allocated to rehab of a rental trailer, another 5k on sewer tile repair, 3k on tree removal, 3k on a water leak and another sewer repair
Payroll was 8500, trash was 2500, taxes and permit 4200.
2015 numbers
65k gross
49k expenses. Net 16k
18k utilities, 13k repairs,6500 payroll
2014
70k gross
49k expenses net 21k
Repairs 16k, utilities 13k, payroll 6800
What is this park worth? What concerns do you have?
What needs to be done to get this park to 30-40% expense ratio?
How does that factor into pricing?
I expect seller to want 300k from discussions.