All Forum Posts by: Jason Harper

 Account Closed:

Thank you for the very detailed analysis!  A few points of clarification: The original analysis is directly from the buyer.  The expenses explained are his expenses for 2014.  I agree that the management expense would not be enough for a full time manager.  I would need clarification on that line item from the seller.  In your experience what is a fair wage for a park manager?

The original expense ratio given by the owner was 31%. Following your quick math you suggest a 50% expense ratio and a 10 cap value and came up with a valuation of $350k. I don't follow your math here could you please explain? The gross operating income (per the owner) was $84,060, @ a 50% expense ratio I calculate a NOI of $42,030. A 10% cap rate provides a valuation of $420,300. Keeping the same numbers at a 15 cap I calculate a $280,200 valuation. What am I not accounting for?

The seller is motivated and is also offering seller financing (terms unknown at this time).  His initial asking price is $325k, equating to a cap rate of 17.85% [($84060*.69)/$325k].  Would a 50% expense ratio be out of line to use in a counter offer with a 17.85% cap rate (i.e. a valuation of ~$235k)?  Would anyone do that deal?

 @Howard Abell:

Great catch on the rental MH's getting very little above the lot rent.  I will need to look into the expenses and the rental rates in the area.  As far as the land contract for the stick home as of now all I know is that there is a balance of $44,000 and is included in the sale of the MHP.  I would assume the $595/month includes principal and interest so there is ~74 months left on the contract. 

Hello All!  This is my first post on bigger pockets.  I was wondering if I could get some feedback from seasoned MHP investors on the following potential deal:

21 Owner Occupied Lots @ $225-$235 

5 Rentals Units @ $295-$365

22 Vacant Lots 

1 Stick Built Home Sold on Contract @ $595

Average Monthly Income: ~$7,005 which equates to ~$260 per lot

Gross Income Income: $84,060 

Expenses:

Landscaping / Maintenance: $8,350 (9.93%) 

Insurance (liability only): $250 (0.30%) 

Real Estate Taxes: $8,400 (9.99%) 

Utilities: $2,700 (3.21%)

Administration: $1,800 (2.14%) 

Waste Management: $4,600 (5.47%) 

Total Expenses: $26,100 (31.05%) 

Net Operating Income: $57,960

Assuming a 10% Cap rate the value of this property today would be $579,600. 

The MHP is almost 40 years old and made up of mostly single wide trailers. The MHP has 2 wells and its own septic system. Do you guys see any red flags and what would you offer for such a MHP?