Mobile home park for sale.. Need some help

[Travis Elliott]

I am looking at a mobile home park. They are asking $550,000 for it and there are fourteen spots that bring in $250.00 each so a total of $3500.00. There is also a house and a large shop. The house may need some sewer work but it would rent for $600.00. I am wondering if this is a good deal or not.

I would keep the shop for my own use so there wouldn't be any income there.

There arent any mobile homes included in this sale.

You should also know that there are a total of forty four spots but only fourteen are rented. I dont know what kind of sewer work the other spots would need to rent them

[Jefferson Lilly]

Empty lots are worth $0. It is too much work to find, move, rehab, and rent a mobile home to fill a vacancy. The rent/RTO from the home itself is barely enough to make it worth while. You do not want to pay a 30x multiple for the land underneath it. The land of a vacant mobile home pad is worth $0.

The 60x (off city utilities) and 70x (on city utilities) multipliers of monthly rent are correct.

The correct way to value a MHP is the lot rent multiple, plus the FMV for the individual mobile homes (not a multiple of their rent). 1970s 'beater' MHs might be worth $1,000 - $2,000. 2000-and-newer MHs might be worth $20,000 - $25,000. Find out how much your local market will pay for the mobile homes based on their age and a reasonable ($1,000?) down payment.

Then, simply add the land value and the MH value together, and that is what is fair.

So at $550,000, they are way high in their asking price, - unless that is an awfully nice house and shop..!

Hope this helps,

-Jefferson-