MHP Analysis

[John Hixon]

Hello,

I was wondering if you kind folks could look at the below deal and tell me what you think. This would be my first MHP, I have several SFR's but I am not a huge fan of them and would like to branch into MHP's.

Lots: 24

Parked owned homes: 23

Average rent for parked owned homes: $485

City water and sewer.  Water paid by park.

Park is all electric and all units are metered with updated boxes. 

The financials are:

Gross income: $105,707

Operating expenses: $67,124

Net Operating income: $38,853

Expense Ratio: 63.5%

After reading a lot of posts I think I would try and sell off the parked owned homes and just collect the lot rent.  I think that would drastically cut down on operating expenses.

The owner said he is willing to do seller financing.

Let me know what you think.  Any and all advice is welcome.

Thanks,

John

[Jim Johnson]

you need to base the value on the prevailing space rent ( adjusted for utilities being paid or metered). Do you have that number?