Mobile Home Park Analysis

[Ethen Armstrong]

Ok, so my partners and I are looking at a MHP with 31 currently rented units and 15 vacant lots on 10 acres of land.

There are 16 POH's rented @ $600/m and 15 owner owned @ $265/m. Current market lot rates are around $300 - $350/m, and the rent has not been raised in about 4yrs according to current owners.

Current expenses for the park are roughly $47k with me padding the numbers quite a bit to stay conservative(factored 10% vacancy & roughly $15k for property management when we, as owners, will be self managing park is 15 mins from my house).

The rough NOI is coming in at around $99k.

Only real downside is park is on Well Water and Leach Bed septic system. So a lot of hassle with the D.E.P. that we have to deal with but from all of the conversations with the D.E.P. and seeing labs the water and sewage are in good order.

The asking price is $710,000 seller financed at 3.5% for 15 years with a balloon payment at the 5 year mark with option to extend financing down the road (buying from mom & pop who don't want to pay capital gains).

So after financing we are looking at a take home of roughly $47k cashflow before taxes.

Thoughts?

@Frank Rolfe