Mobile Home Park Deal Analysis

[Jesse Womack]

Hey everyone, I'm new to the site and appreciate any responses and feedback.  I've been doing fix and flips, single-family and multi-family rentals with my two partners for a few years now but we are looking to get into the mobile home park arena.  We recently came across a deal but since we are new to this aspect of real estate, I was hoping to get some outside opinions on whether you all think this would be a good deal. 

A little background:

The park is 14 acres, sits 5 minutes from both a popular lake destination and a popular fishing river.  it has 45 pads on it, all of which have outdated mobile homes that are park owned but need to be replaced.  in addition it has 2 small cabins and 2 single family homes on the premises.  half the roads are paved, the other half are packed gravel and it has a large shop on the premises.  The overall park is definitely a little run down but has potential to have new life injected into it.

The financials: (these have been verified with backup documentation from the broker)

Asking price: $800,000

Annual Rental Income: $181,500

Annual Expenses: $58,225

NOI: $123,500

Cap Rate: 15.43%

From what I can tell (depending on financing) that would provide a good initial cash flow, and if you were to put that cash flow back into the park to bring it up to date with newer trailers, etc... you could charge higher rents and increase your cash flow even more. 

Based on this, what are your thoughts on this as a mobile home park investment?  If you need more information for a better evaluation just ask and I can provide it.  Thanks for all your help on my first post here at bigger pockets!