[Calc Review] Help me analyze this deal

[Mike G.]

Hello BPers forgive me as im trying to do my best with the sellers financials provided. Im trying to analyze this deal to see if it makes sense to purchase and if so at what price.

The Knowns:

All utilities are thru the city and there is no well or septic its city sewer, electric, trash, water etc.

The park appears to be very pieced together and there is a mix of mobile homes, a house, apartment and several single "shacks" some with plumbing and some without. (tenants without take a piss and deuce in the laundry room/ park restroom).

Seller isnt willing to carry any financing, they want to cash out

General overview of rent roll and occupancy and financial break down which i entered in as much data as i could based off what seller provided in the Deal Analyzer

The Unknowns:

amount of deferred maintenance

Amount of inherited issues with city in regards to permits for modifications and additions made to mobile homes in the park structurally and with plumbing and electrical and who knows what else.

Im making an offer contingent upon inspection and a 30 day due diligence period with an appraiser and city inspector to look and tell me what issues i may inherit if i purchase the park.

Fire away with questions and ill try to clear up the financials as much as possible to make sense of this and i can hit the broker up with specific questions to get a better picture of the deal as a whole. 

[Jeffrey H.]

Familiarize yourself with “lot rent” versus “home rent”.  Here is specifically why it’s important, and the deal may not appraise...

http://forum.mobilehomeuniversity.com/t/poh-and-appraisals/12359

Instead of capping the home rent into the purchase price instead value each home as an individual purchase on top of the purchase price for the capped value using lot rent.  Say the Park is worth 100k based on lot rent capped, and each of the 28 homes are worth 5k blended average (e.g. what you can reasonably sell them for in your market).  Total price should be 100k + 140k = 240k.

The MHU book is a great resource.  Keep asking questions and good luck.