All Forum Posts by: Shawn S.

thanks for the reply.  Anybody else have any insight here?

Also park sits right next to a newly renovated 100+ unit apartment complex

Any input or advice is appreciated.

Thanks

I am looking at making an offer on a park in the Southeast.

Median house value 120k

Median income 39500

Population 200k

Park age 1970

City water master metered.  Owner pays water and trash

Gas and electric handled by city and submetered 

45 lots

40 lot rent

1 free lot to manager and he makes 550 a month

3 park owned 1 vacant

2 lot only vacant

Lot rent at 160 but increasing to 185 soon

Park owned homes rent for 380-420

Paved roads 

extra land to build possibly

2016

Gross last year was 80k and expenses were 70k= net of 10k

Expenses included 18k for utilities and almost 30k for repairs and maintenance of which 5k was allocated to rehab of a rental trailer, another 5k on sewer tile repair, 3k on tree removal, 3k on a water leak and another sewer repair

Payroll was 8500, trash was 2500, taxes and permit 4200.

2015 numbers

65k gross

49k expenses. Net 16k

18k utilities, 13k repairs,6500 payroll

2014 

70k gross

49k expenses net 21k

Repairs 16k, utilities 13k, payroll 6800

What is this park worth?  What concerns do you have?

What needs to be done to get this park to 30-40% expense ratio?

How does that factor into pricing?

I expect seller to want 300k from discussions.

I ended up offering 800k and he countered at 900k.  He then offered me 800k and he keeps the park owned trailers and would pay lot rent on those.

We could not agree on the price so I am back looking again...

Park is in Tennessee.  average lot rent is around 235-250 for singlewide and not sure how much more doublewide lot rent should be?

I placed a value of 10,000 per 1990s singlewide and 20,000 per doublewide

Current owner passes taxes through to the tenants except for around 2,000.  I will have to check with his coverage.

the water expenses are billed back to the owners.  there is no leakage and he is actually making a small profit of 5 dollars a unit per month.  owner is responsible for septic and the private lines from the public tap.  there are some common street lights that cost about 165 per month.

there is a small upside in rents.  I think I could increase from 210 to 225 and the double wide from 225 to 240.  the issue is that everything is being passed through at this point.  they just had a rent increased 1.5 years ago.

the other area to add income is with developing the additional 4 acres into lots.

my only real concerns are the private water lines and the septic tanks.  Can someone explain the potential costs involved with septic and private lines.

thanks

also please advise on septic.  most homes are on one tank per 2 homes.

I am looking at a mobile home park with the following:

42 lots in all- 34 lot rent only, 8 park owned (only vacancy is 1 park owned home getting ready for a new tenant)

-Double wide lot fee is 225/month

-Singlewide lot fee 210/month

-City water to park (private individual meters) each tenant is responsible for paying water they-

-On septic

-Lots are mowed by tenants

-Trash paid by tenants

Brings in 155,000 per year gross, net is around 132,000 but is being self managed

expenses: taxes 2,000, insurance 1,000, gravel for roads 1200, septic tanks 2,000, park owned home maintenance 7,000, misc expense  5,000 (mowers, mailbox, other misc expense)

Currently there is no property manager

Adding in the cost of a property manager at 10% of gross is 15,000

Adding in the cost of lawn service for the common area is 3,000

Adding in the cost of a 10% vacancy is 15,000

Underwriting at 100,000 NOI 12.5 cap at 800,000

-12 acres

-4+ acres of flatland not being used ( ability to add around 6 more units)

-clean and well kept

-Main Road is paved with some speed bumps. side roads are gravel

-3 singlewides come with the property. Rent for singlewides is: 650/mo, 450/mo, 500/mo.

-5 doublewides come with the sale of the property ( 3 on foundations) Rent for doublewides is: 800/mo, 800/mo, 650/mo, 600/mo, 700/mo

-30 singlewides

-12 doublewides (5 of which are on a permanent block foundation)

Most lot rent only homes are 1990-2002

Most Park owned homes are  1995-2002

I put a value of 10,000 each on the singlewides

I put a value of 20,000 each on the doublewides

Please help me determine a valuation for this property.  I am wanting to offer around 800,000.  Please let me know of any downside or inaccuracies that you see above. 

I am somewhat concerned about the private water meters and the septic but don't think it is a deal breaker.

Thanks in advance for your responses