MHP Valuation -- High Lot rent

[Aman S.]

Looking at a park with 19 Lots, 2 single family homes, in the city, very strong market, all POHs, Public water and sewer, Tenants pay all utilities, Lot rent $650 avg, Single Family home rent $900 each per month, additional $200 for storage per month, so gross rent is $170k/year. What will be your ballpark evaluation on this? I know there are several other factors. I currently own a park in WV and wanted to get some advice from other park owners as this is a park in the city with high lot rent.  Thanks. 

[Janene Tompkins]

you mentioned these are POH's, is the $650 Lot Rent JUST the Lot Rent? Or is it Lot and Home? I would separate out the lot only rent from the total rent on the POH's. What are the annual expenses of the property? I always base my offer on NOI of the Lot Rent only plus a shell value for the homes. Here, you have some extra stuff with the SFR's and storage units. What kind of condition are they in? Will you need to factor in some CapEx? In summary, get the NOI, apply your cap rate, figure out what CapEx is needed and take that off your offer. I'd love to hear what other folks think. Good luck!