[Calc Review] Help me analyze this deal

[Robert Clifford]

I'm looking at my first Mobile Home Park deal.  I used the BP Rental Property Calculator.  I have 8 duplexes, but MHPs are new for me.  I've been trying to read and learn, and I'd like to pull the trigger on one.  If you have experience with MHPs, can you give me some feed back on expenses?  I have a great property manager that I'll convert these too.  Also, I plan to convert the park owned trailers to tenant owned, and may have to do some rehab.  I don't have that baked in at this time. 

I'm looking for a lender as well.  I've called a few and all so far have a $1M min.

View report

*This link comes directly from our calculators, based on information input by the member who posted.

[Ryan Groene]

To value this property properly you will need to establish the lot rent that you will set all of the POH's at when you sell them off.  Please keep in mind that it can be seen as a good thing because you can reset the lot rent to what the market is or close to or whatever you like.

also, selling off POH's can be more difficult as the tenant that is in the rental is there for a reason normally, they want to rent.  One way to off set this is to charge more for the rental if they don't want to do some sore of rent credit/rent to own sort of thing.  

Your expenses for a park that has city water/sewer that the park pays will be in the 40% expense range or higher based on how small this park is.  unless lot rents are really high($400), smaller parks have a higher expense ratio with utilities that aren't direct billed because you don't have enough gross to cover the fixed/variable cost of the operations.  Percentages for operations are normally same up until about 40-50 lots, that is where you can start to get some better margins.  

You also have some additional value in submetering water and sewer, which you should budget to only collect about 70-80% of it from your tenants.

If you have number of occupied lots x lot rent x .6=Net operating income(NOI)