Mobile Home Park, Pinellas County FL

[Jack Tait]

Hi,

I have been looking at a mobile home park deal that seems to have some good upside potential. The property is a 33-unit park (manager lives on-site for free so 32 effective units) with 17 park owned homes, 2 apartments, 4 park owned RV's and the remaining 10 are just rented lots. the park is currently 25% vacant and is a bit of a dump. The lot is 1.33 acres but sits in a growing area in Pinellas County, right next to a chick fil a, Walmart, target etc... near main arterial roads and good demand drivers with solid population growth. We have 11 townhome and SFR rentals and are considering buying a mobile home park to boost cashflow.

So the subject has a sale price of $925K , gross income for trailing 12 months was $150K and annual expenses were $58K of which $35K were utilities ( landlord pays and they are all city, water, sewer etc..). Avaerge 

From my very conservative underwriting parameters, and with limited capital expenditures i'm coming with a present value of around $730-775K for the property.

With 32 x $450 X 12 x .5 x 10 = $864K which is much closer to the list price. 

My questions are;

1) Does this seem like a potentially good deal? - (First time with a MHP, not sure what to expect)

2) What is the biggest problem/best way to deal with old, fully-depreciated park owned homes? Gift them to the tenant and lower maintenance costs? fix them up and up rents/ keep home in use? gid rid of them?? this part is the big underwritting killer.. too may variables 

3) We're thinking of metering each pad individually and implementing expense reimembusrments effetively cutting the expenses by over 50% and increasin the capitalized value of park by 20-25% ???

Any advice is very apprciated !! 

these are some of my assumtions, Let me know if i need to change something!