MHP in NY - Buy or Pass?

[Jen Bastian]

Hi all,

Looking for opinions on this MHP in NY, please.

Here’s a snapshot:

Pros:

-10 cap

- Value add (77% occupancy, potential to sub meter and bill back water)

-90% TOH

-Decent metro: 100k population, $96k median house price, $1k for 3 bedroom rent

-On site Mgr

-Solid recent rent collections

-The numbers work - good cash flow

Cons:

-Rent control (3% yoy max increase)

-Covid hot spot

-NY not landlord friendly

-18% vacancy in town (May be seasonal)

-Septic - uncertain of age or condition

The top employer in town, a glass and textile manufacturer, may also be tanking; They’ve laid off about 800 people YTD, which is about 8% of the town’s workforce. This is anticipated to have “tremendous negative impact” on the local economy, according to town officials.

With this birds eye view, would you move forward with the deal? Why or why not?

Thanks in advance!