12 Unit Mobile Home Park Analysis

[Jimmy H.]

Just saw a recent listing on a mobile home park that is about a 45 minute drive from my current residence. I am unfamiliar with MH park investments and am curious as to how to value the cashflow.

Seller is asking $199k for the land + 5 park owned homes.

Homes rent for $450 (includes lot rent of $195)

Or the seller is offering the land alone for $149k.

Lot rents are $195 * 12 = $2,340 gross per month.

2% rule indicates land value of $2,340 * 50 = $117k (I know the 2% does not neccesarily apply to MH parks)

Water and electric are paid for by tenants directly to the city, the owner incurs the cost to operate the septic system.

Is there a rough rule of thumb for MH parks? I've read an online article that mentioned a 30% operating expense retio as appropriate.

Would a land only deal be a fairly passive venture? I'm thinking that collecting lot rents would not be too troubling - no maintenance?

Deal or no deal? Land only or both? Lonnie the owned homes out? Thoughts?

PS I am working on getting accurate property tax, septic, and insurance costs - what other costs might I incur?