MPH Underwriting all TOH!

[Sant S.]

Hello & Happy New Year to All!

Greeting everyone and thank you for taking the time to read this posting.

I am new to the MHP asset class but absorbing the loads of information on biggerpockets.

I came across the below deal and think its very intriguing, but I believe I'm being to optimistic and looking at these figures with blinders on.

This park is in upstate NY known for Summer tourism.  Built in 1970.  There are 19 lots.  One of the 19 lots is a home that rents for $1200.  The other 18 mobile homes are TOH's with lot rents of $600 each.  This struck me right off the bat as high.  I searched lot rents in BP and came across the method of 2 BR apartment rentals in the area and lot rents should be roughly half those 2 BR apt figures.  I found lower end 2 BR apartments for $975 and upscale ones for $1600-1800.  BTW these apartments were 20 minutes from the MHP as no apartment complexes are right next or near by the MHP.

Expenses are advertised as ~$25k annual.

(RE Taxes 8K, Property insurance $1800, R&M $1500, Water & Septic $3500... plus a few other smaller expenses permits, legal...)

The septic is an obvious red flag to me.  I'll do a deeper dive if this gets to the DD phase.  

Pros & Cons of Septic???

Property is Municipal Water which I assume is a good thing.   

I understand I would be purchasing this investment for strictly cash flow and there is limited add value.  There isn't room to build more pads and even if there was, approvals are required.  

Can we expand on the downside risks?

As I said above I am looking at this with blinders on.... 

Mostly all TOH homes seems like a great position.

This deal is advertised at a 12 cap.  

Priced just around 975k