half mobile homes--half long term RV-how to value

4 Replies

Looking at a small 15 unit park.

$200/month pad rent

4 owner occupied pads rented @$200

4 long term RV pads rented @$200 (these people are living there)

2 park homes-need renovated.

water is well. checked out good

2 skeptics have been checked (I will check again during DD)

I estimate value at 8x200x12x.5/.12=$80,000   (asking price $120,000)

no value for the park homes

Question is do I value the RV income the same as the mobiles?  An RV can be easily moved if need be compared to a mobile home.

Thanks in advance to everyone.

Mark

That is septic not skeptic.

Mark

You should be skeptic about septics.  Age, pumping schedule and possible break down and replacement are all issues.  In some areas well water provided to others must be inspected and tested routinely.

What are expenses?  taxes, insurance, utilities, wages, maintenance, grounds keeping, snow removal, any other common areas, laundries, playground, club house.

What are the current owner's income/  Tax returns would be nice to see.  Security deposits, etc.  Other income than rent?

@Mark Kvam  

  I personally would not buy a park with well water and skeptic's  or even septic's..

either of those goes down and it can be huge problems and costs..

I just bought one in Oregon that sounds similar.. only all the MH's are park owned and they bring in 450 to 475.. 15 of them  3 are condemned and need to be dimantialed 1 house one studio  I picked it up for 80k plus 30k in code violations.  But its on city water and sewer..

my intention is to just stabilize and flip

So how you value RV is not the same as Pad Rent. The RV's can, and do move and the labor to fill the lots, collect daily funds etc drives your RV management costs way up. To know the value you would need some historical data, and some very good management cost numbers. You will still apply a CAP to the RV numbers, but remember you CAP the net, so you need strong and accurate income and expense numbers to go from. In a small park your RV expense numbers can eat through a LOT of the daily rent.

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