Mobile Home park deal analysis

[Ben Freeman]

Hello Friends! 

First off, thank you for looking at my post! I really appreciate this community and all the wealth of information on here. 

I am currently looking at  buying my first mobile home park and am trying to sort through the details to make sure its a wise buy. My background is in construction and business development. I thought it would go over the details and then see if you all  had any input. 

This is a 47 unit park on 7 acres total. Currently has 3 acres of vacant land which I think we could turn into storage units as well as, a separate 40x60 shop/ pole which I think could bring additional rental income. 

Park currently has city water and sewer, Nat Gas, electric and cable. 

asking price is $400k 

Currently has 12 paying tenants and 5 vacant pads. 

This leaves 30 trailers that are not currently doing anything. 

Of the 30, 4-6 units I think can be renovated and either sold or rented out quick. 
As I am working to analyze this deal, are there vacancy and repair rules of thumbs? Its not super old park so I don't think there will be a huge infrastructure cost for several years.  

It is a smaller town that has a lot of manufacturing jobs. I was a little concerned with the demand for affordable housing and put up some Facebook Market ads to see what kind of traffic I could get with more buy in than "is this available". I had my listing up for less than 24 hours and had over 60 solid messages asking about the houses but were also willing to give me budget information. There were over 2500 views on my listings. My gut is that there is a real demand for this park. It was recently inherited by the grandson and I think the management really was neglected as his Grandfather aged. 

I think the biggest challenge will be bringing in replacement trailers. I think that difficulty makes it my best asset, as my background is in supersize moves for heavy equipment and I have good relationships with all the job site trailer movers across the country. I am pretty good at finding creative ways to get trailers inexpensively and get them moved into my site. 

I have found a bank willing to fund the deal with 25k down and give me an extra line of credit to infill and do repairs as needed. Do you have any rough numbers to use for cost of repairs/vacancy/ cap ex for a park to help navigate the acquisition process? I am more familiar with tradition housing and rental but like the scale ability of mobile home parks and want to own 1000 pad in the next 5 years. 

What things do you think could be hidden that I should look at? I am planning to meet with the bank in the next week or so to get a better handle on the loan type and information. 

Thanks again for helping! 

Ben