Rental Property Investor · Clarkston, GA · Member since 2012 · 2k+ posts · 1k+ votes
11y
Hi Anthony, Figure out area lot rent by googling: mobile home park <city name>. Then call. Some professionals hire part time callers who have the accent of the likely resident. But no problem if you call.
A lot rent park gets priced like this:
$lot-rent x 12 x #paying pads (ignore non paying pads) x 0.7 (for pricing figure 30% expense ratio) = NOI
It's standard to use 30% expense ratio for figuring an offer price of a 100% lot rent park. 50% or higher for park owned homes.
Price = NOI / cap rate as fraction (0.1) for 10% cap.
That's it. Forget about valuing land etc. Commercial sells on NOI alone. Ok if something special might bump price a bit.
Commercial Real Estate Broker · Chicago, IL · Member since 2015 · 123 posts · 59 votes
11y
It's nice to know that he may be under market rent but work with the $365. Using Curt's figures which I agree with gives you an 11 cap at 1.3 million. Not bad for a pad only park. However, What does the water bill look like. When water is not individually metered, it tends to be over used. The water could change a 30% estimate.
Specialist · Northern CA · Member since 2014 · 154 posts · 57 votes
11y
@Howard Abell I will look into the water bill info. Thanks for heads up. I know they bill them a flat rate of $100 a month for water and sewer but not sure what the total bill is every month.
Vendor · NY, NY · Member since 2009 · 175 posts · 52 votes
11y
@Account Closed
Fancy seeing you here, glad you found something :-)
40% expenses is usually when you own or manage some of the utilties/infrastructure (well water, septic etc), and 30% is a ballpark where everything is city and direct or submetered (gas and electric excluded).
But basically take the P&L during due diligence and rip it apart. I have made offers based on rent rolls and then when I get a real P&L and real access the price drops dramatically because the owner "forgot" to factor in something.