Need help analyzing if Mobile home park is a good deal and

[Scott Esmail]

Hey,

I am in contract for a MHP in Florida, and would like to know what others think, and also what the future price would be for the park after I turn it around.

24 lot park

dirt roads

8 tenant owned paying $300 lot rent

1 vacant pad- needs trailer

1 tailer vacant -needs rehab and tenant 

14 trailers getting approx $625 rent

Well and septic

tenants pay for electric 

Owner pays for garbage $700, lawn care $800 and electric running well pumps $400 per month 

Park is 6.6 acres 

Asking price 500,000. I am putting down 150,000  and rest owner financing at 6 percent ballon 5 year 20 year am

This park is distress and just by looking at the park upkeep and the tenants, I think most are not paying and need to be evicted. Owner can't provided any rent collection- mom and pop owner who says he is collecting cash.

The park need the roads to be fixed up, trailers to be rehabbed, outside power wash all trailers, paint outsides of trailers, landscape and clean up and a new trailer brough in. Approx rehab price $100-$125k

My question is am I over paying for this property ? It is the lowest price per space in the area.

I think that after I do all the required repairs and being in new tenants I can get $350-$395 for the 8 lot renters and if I end up renting the other 16 trailers I can get $750 rent. I am also going to bill back the lawn maintence cost and garbage  back to tenants. What will be the new value of the park? Lets say at a 10 cap. I am going to self manage the park.

I am an experienced single family operator but this is my first MHP, also is the quality of tenant going to be much lower than single family? Also is the turn over rate going to be much higher than single family?

Thanks in advance