-15 Mobile homes all on individual lots and fully rented
- Sewer/Water by the city and metered to the tenant
- Rent for $450 each
- Average lots in the area rent for $175 and homes this size $475
- All 15 homes are located on the same road next to one another
- 2.3 miles to walmart and city population of 61k
Question: Since these aren't in a "park" would you still value them the same way?
15 x $450 x 12 x .5 / .1 = 405K <-- Seems way to high
15 x $175 x 12 x .5 / .1 + the blow away value of the home (2k each) = 187k & 157k w/o homes
I'd go with the second formula, using lot rent only, then adding the wholesale value of the homes. Strongly consider your exit strategy though.
I second Josh's comments about #2 adding in the value of the home. single or double wide..
My exit would be to sell the homes to all the owners and hold the notes till paid off. 10-15 yrs of monthly income is great. Dodd Frank limits you to seller financing 3 per year in your own name. There needs to be a solution in the market place to en mass sell so many homes at once. In general it's a great strategy for individually titled lots and utilities being billed to the renters making this possible.