I am looking at a property that looks like a great buy and hold here is the information.
This property sits on 4.75 acres in Cohutta, GA.
The house is a 3 bedroom / 2 bath home , then there is a 3 bedroom / 2 bath Double wide and 8 single wide mobile homes on the property. ALL are park owned. One of the single wide mobile homes has 2 bathrooms.
They are all leased . Each with a 12 month leases. The tenants are currently paying weekly as this is customary in the area for the tenant base being serviced. Most work in the factories, restaurants , convenience stores, etc... and get weekly paychecks. It is much easier for them to make a weekly rental payment than to save up and pay for a full month at a time.
CURRENT RENT ROLL:
Note: They all pay an additional $30 per month for water as there are only 3 water meters on the property... all of which are paid by the owner..... The $300 of income for water usually covers the water bills.
The tenants pay their own electric and cable bills.
The first single wide is the only unit that has NOT been renovated. There is a long term tenant that was there previously . That tenant pays very well has no issues. All other units have been remodeled with new subflooring/ floors/ paint / cabinets/ appliances/ etc as needed on the inside. Owner replaced all bad underpinning and insulated pipes this past winter.
1.) House... $195 / week
2.) DBL WIDE ..... $169/wk
3.) Single wide #1..... $100/ wk
4.) Single wide #2..... $145/ wk
5.) Single wide #3..... $155/ wk
6.) Single wide #4..... $145/ wk
7.) Single wide #5..... $155/ wk
8.) Single wide #6..... $150/ wk
9.) Single wide #7..... $150/ wk
10.) Single wide #8.....$150/ wk
TOTAL WEEKLY RENT ROLL.... $1,514
ANNUAL 100% RENT ROLL ......$78,728
PLUS $300/ month from tenants for Water.... $3,600
TOTAL REVENUE......$82,328 at 100% Collection Rate
Then to be conservative... assume lose 10% for turnover from tenants that don't pay or move unexpectedly. ($8,233 LOSS)
NET COLLECTIONS NOW AT: $74,095
EXPENSES: Approximately $26,951 per year
LEAVING NET INCOME @ $47,144
SALES PRICE NOW @ $375,000
CAP RATE NOW 12.57%
EXPESE DETAIL
Property taxes : this past year was actually $1,451
Insurance : $4,000 per year
Garbage Service : $1,200
Actually, is currently $88 per month
Pest Control... As Needed.. Not in budget
We let tenants take care of this but we have someone we can send as needed. We just make sure is pest free when leased to them.
Management: $3,750 Approximately (Assumed 5% on $75k)
We manage the property for 5% of collections. We have a drop box on the property and also manage almost 500 units in the area. So, we are very familiar with the tenant base and our phones are ringing all the time with prospective tenants.
Lawn Service: $1,500 per year....
From April until October , we have a crew (Calloway Outdoors) that charges $125 per trip to cut the 4.75 acres. We had them go twice each month.
Maintenance: $10,250
Most of the major items have been addressed... I like to budget $500 per year per unit ... so for this property would expect $5,000 per year for appliances / cleaning and making repairs between tenants when they move away ... Then I doubled that in the pro-forma to be conservative. That way you can cover roof repair on the house or other leaks or unexpected items that come up.
We have maintenance people we send at reasonable prices to make repairs as needed. We are also happy to send the owners preferred vendors if they have any.
WATER: $3,600 per year is listed on the pro-forma
Mentioned this above but it is actually covered by tenants monthly payments. The last few water bills all totaled less than $200 per month ... so we are under budget here in expenses and getting the payments from the tenants.
POWER: $1,200 annually
There are usually no power bills as the tenants pay there own power... I thought there might be a security light bill but have not seen one in last couple months. We budgeted $100 a month to cover the security lights and the occasional power needed between tenants.
If anyone is interested let me know at [email protected] be quick I get the feeling that this property will not last long.
