Please review my analysis

[Jamison Schweitzer]

Hi everyone

I have an opportunity to purchase a duplex and two mobile homes on two parcels and I'd like to run my analysis by you all to see if I'm thinking clearly...  and I'd love any advice regarding owning/managing mobile homes.  Thank you in advance!!

Here is the data:

Approximately $200,000 to do the deal

$190,000 purchase price

Loan 75%LTV $142,500, 25 year at 5% ($9996 PI annually)

Partner Cash $35,000 for @40% equity (family) :)

My Cash $21,840 @60% equity

Annual Rents $30,660

Vacancy 5%

Taxes $2070

Insurance $1812

Prop Manage 7.9%

Snow/Lawn $75

NOI: $20,000 approximately

Repair costs are minimum as most are newly remodeled $500

Acquisition costs . $2000

Reserve account $7500

The property is in a small town in Iowa near a decent sized college town.  There is one very long term tenant, one vacant newly remodeled unit in the duplex and two occupied mobile homes in average condition. Both 1970, 14x60 ft. attached to land.

My analysis, for my portion of ownership (60%), based on 15 year holding period

PreTax Cash flow $6052

Annualized ROI 13.39%

IRR 34.82% (includes net sales proceeds of $203,535 at year 15)

I've got the property under contract because I felt it to be a solid deal.  Do you think so as well? I appreciate your time and advise!

Side note, although the mobile homes cash flow, the bank will not finance them but will finance the duplex and 2 lots.  It's not a problem because the full $190k of value is in the duplex/land so in effect I'm buying the mobile homes out of pocket for very little.

Jamie