First time investor

[Konstantinos Porfyris]

Hi all I’m brand new to the community but I’ve been reading and educating myself through BiggerPockets ... great material !

I live in nyc but I’m thinking of investing out of state as the NYC market is way too expensive

I've found a mobile home park in the south I'm interested in. 16 acres 8 Park owned homes with a rent roll of 4250 a month. After all expenses including taxes and property management and mortgage NOI is $31,000 a year... is this too good to be true ? The property is listed at $185,000.

Any tips and advice is appreciated thank you all so much !

[John Jacobus]

@Konstantinos Porfyris A few things to consider:

- What is the lot rent vs the rent for the mobile homes? You can only capitalize the lot rent portion in your valuation. Therefore, the $31k NOI stated above may be inflated. I suspect the lot-rent NOI is at most half of the stated $31k, which makes the cap rate closer to 10% (still not bad).

- What type of utilities exist on the property?  Municipal utilities or private utilities?  On smaller deals such as this, I would be cautious about taking over a park with private utilities as the cost of repairs may be catastrophic to the smaller operational base.

- What is the size of the metro area in which the park is located?  I would be cautious about buying a small park in a rural town in the southeast as you may not have room to grow rents and/or attract residents.

- 16 acres with 8 homes is very low density.  Is there room to expand?  If this park is located in a decent metro area (75k+ population), you may have significant upside as a result of establishing new lots and bringing in additional homes.  Typically, you can bring in 5-10 lots per acre, subject to local zoning, density, and offset requirements.

- Financing this park may be difficult due to the low price.  I suggest asking for the seller to carry a note.

There is a decent group of MHP investors in NYC and we meet regularly to discuss our pipeline, partner in deals, and explore opportunities.  We meet regularly at events such as the one below.  I look forward to seeing you there and/or connecting through other means.

https://www.biggerpockets.com/forums/521/topics/682438-mobile-home-park-investor-meet-up-in-nyc-mhp-tribe