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Updated about 5 years ago,
Mobile Home Park - Deal Analysis
Good afternoon everyone!
I'm new to real estate investing and am grinding to secure my first passive income property. In my search, I came across a mobile home park in my area that appears to be very well maintained and cash flow positive according to the financial paperwork on the property. However, I'm struggling to analyze the deal properly given that the sale includes the primary residence of the seller.
Also, the listing price is based on CMA and not the actual income.
The "quick" of it is as follows:
Listing Price is $775,000.00
- Property is completely fenced in with a gated entry.
- 10 Mobile Homes (Range from 70's- 90's models & Park owned) all on concrete slabs with individual sump and septic tanks.
- 1,800 square foot wood frame home and a park office building.
Current Lease Payments = $5,405 x 12= $64,860
Expenses= $14,427/year (not including home expenses)
Based on current CMA:
Lease Payments = $7,100.00 (mobile homes) + $1,500.00 (3/2 residential home) = $8,600.00 x 12 = $103,200.00
Current Cap Rate: 7% (based on listing price and not including home rent income)
CMA Cap Rate: 11% (based on CMA + 16,000/ year expenses)
I believe the property to be over priced but could be worth the investment, but want to make sure I'm understanding the "deal" correctly.
Any good advice is appreciated!
Thank you for your time!