Help me analyze this deal (mobile home park)

[Cody Strickland]

Hey BP, I'm new to the forums and thought I'd jump right in by asking for advice on a potential deal. It's a 44 pad mobile home park, and although I don't have any experience with MHPs, the numbers seem interesting enough to consider. I have the option to bring in an experience partner if needed. Any insight would be greatly appreciated! 

Here's the scoop:

- 40 of the 44 pads are filled

- Park owner owns 27 of the mobile homes (no vacancies)

- Most of the homes range from 1990s to early 2000s

- Park road needs to be paved, some of the homes (maybe 3 or 4) need to be replaced. 

- City water, but not sewage. Sewage treatment facility on property

- Owner is currently handling all repairs and management so expenses are pretty low (about 20k/year)

The numbers:

- Seller's bottom dollar = $800k

- Gross rent = 210k, expenses = 20k, so cash flow = 190k

- Each home rents between $500-700/month. 

- Each pad rents for $175 per month (could bring this to $225 or so after upgrades)

- Assets and property appraised at $350k

Our long term goal would be to upgrade the park (maybe 100k over 2 year span) and work on rent-to-own deals with the current tenants so that we only own the lots at $225-250 each.