First 5+ unit deal with a partner. Do I have this right?

[Wilson Lee]

Project: Mobile Home Park

With the click-bate title aside, I found a small mobile home park that seems profitable as is. Also, there is some value add upside. It seems like we can refinance and get a large chunk of our investment capital back if we expand the park on too existing lots. Please read over this and let me know if there is any over-sites on my part.

Current. Here are the numbers as the property sits now.

Asking price $110,000.

Income Annual

Scheduled rents receivable $ 12,600 annual (Lot rent $175 monthly 6 lots)

Expenses Annual,

OPEX

Land Tax, $400 (verified through tax assessors office)

Tax prep, $300

Septic maintenance, $120 ($200 per service once every 5 years x 6 units. Tenants pay 1/2 per current lease)

Vacancy loss, $252 (inflated to 2%. currently no vacancy for the last 13 years per owner)

Notice delivery, $200

Total operating expenses $1,272

CAPEX,

Septic system $600 ($3,000 per unit x 6 units with a 30 year life time )

Gravel driveway $360 ($600 per unit x 6 units with 10 year life time )

Total capital expanse $960

NOI = $11,328

Cap Rate = 10.3%

There is 4 extra lots that we can install homes on. I found foreclosed mobile homes for sale form a local dealer with minimal rehab. They sale for 10K to 12K. They cost 2 to 3K for movement and instillation. The homes would be sold with owner financing for $25,120 including interest. $1000 down and $335 monthly payments. We can opt for a rent-to-own agreement under the sames terms if there is issues with dodd frank. Lots will still be rented at $175. The lots have septic tanks installed already. I have to get them inspected to verify their integrity by the local municipality.

After 2 years with expansion.

Income Annual

Scheduled rents receivable $37,080 annual (Lot rent $175 monthly x 10 lots. Home rent $335 monthly x 4 units)

Expenses Annual,

OPEX

Land Tax, $400 (verified through tax assessors office)

Tax prep, $300

Septic maintenance, $200 ( $200 per service once every 5 years x 10 units. Tenants pay 1/2 per current lease)

Vacancy Loss, $741 (2%)

Notice delivery, $300

Unit maintenance, $2,400

Total operating expenses $4,341

CAPEX,

Septic system $1000 ($3,000 per unit x 10 units with a 30 year life time )

Gravel driveway $1,200 ($600 per unit x 10 units with 5 year life time )

Total capital expanse $2,200

NOI = $31,739

Evaluation, at a 11% cap rate $288,536

Exit

We can refinance for $288,536. We may have to hold up to 30% equity of $86,560. Leaving $201,975 available for the loan amount.

So, we can cash out our original down payment of $22,000 and our line of credit balance of $60,000. Leaving us with a "free" mobile home park.

Am I missing anything? Is this how this works?