Deal analysis, am I on the write path with this one?

[John Stockinger]

I'm trying get better / faster at some back of the envelope type math to determine if a deal might be worth looking into. I've put together a simple spreadsheet where I just plug in some basic numbers and spit out an answer. 

This is my latest deal, a trailer park 

• 10 spots, 9 are occupied. 
• I've put maintenance and management at 5% because their P&L (3 year history) includes those in their operating expenses
• This is 20% down, 6% interest, over 30 years
• There's an opportunity for another $500 in rent by filling up the last spot

Questions I still need information on

• How many, if any, of the homes are owned by the park
• Is owner financing a possibility

Am I at least on the right path? Any suggestions? My initial thought is yes, this property is worth looking at.

[Paul Stout]

If you were looking at a multi unit building I would say you are on the right path.  In the case of a trailer park you have to evaluate differently.  What generates the income makes a big difference.  Is this lot rent where the tenants own their homes or is this park owned home rentals?  If it is the former then you are probably on the right track.  If it is the latter then you are going to be way off.  A park this small will trade at a 12-15 cap depending on the utilities.  Mobile home parks are unique animals and cannot be assessed like other multi family assets.