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Updated over 6 years ago,
Help Evaluate a Deal: Mobile Home Park, partial HUD
Hello everyone!
This is my first post so please bear with me and be patient if I don't follow standard decorum. I'm just going lay some out of the details and I would really appreciate some insight as if it seems like a deal some of you experienced investors would consider.
There are 20 mobile home units, all of which are included in the purchase price and then the tenants each pay rent. The mobile homes vary in size but rent ranges between $400 and $750 per month per unit. Total monthly rents come to $11,855. 4 of the units are HUD qualified (if you have insight to benefits/drawbacks of this, I'd love to hear it). It's on just shy of 3 acres of land. There is a duplex on sight that the manager lives in. All tenants and the manager would be inherited. Water is master metered and paid by the owner but all other utilities (sewer, gas, cable, electricity) are individually metered and paid by the tenants It is in a small, rural town in Washington state. Probably a C+ neighborhood.
Here is a look at the cash flows (as reported by the current owner):
Expenses per unit: $2,000
Expense to GOI: 28%
Cap rate: 10.3%
NOI: $104,044
Cash on Cash: 29.5%
Asking price: $800,000
Conventional financing, 20% down preferred.
Thank you in advance for any advice you are able to provide.