Mobile Home Purchase Question

[Mitchlyn D.]

I came across an off line deal. Owner is selling a mobile home park that has 5 mobile homes on it. Here are the specifics. 

- Purchase price: $145(mobiles and land included in price) 

- All mobiles are paid in full - 5 mobiles all rented monthly gross is $2500 

- 2016 Taxes were $1,000K - Ran numbers with 5%(Vacancies, Cap Ex, Property Management) and still got $1200 cash flow 

- C + neighborhood My question is, is there anything I missed? What other items should I be thinking about which would determine if it's a good deal?

[Curt Smith]

@Mitchlyn D.

If NOI is 1200/mo and x12 = 14400 NOI/yr

Value of a park at 10% cap rate = 14400/0.1 = $144k but parks this small should not trade at 10% cap, should be 12 to 14% because of Darrell's comments and that to run it you need to live near by.

14400/0.13 = $110k   Personally I'd offer at $100k.  

Besure to get all the MH titles!  No deal unless all titles.

Besure to talk to all tenants and ask what their security deposit is.  Seller needs to xfer deposits.  Inspect repair of the homes.

Don't buy private water well parks.  FL is trying to shut those down.   Septic per pad is comment.  Call the county septic inspector re their on-going permits.   Ask if any county or state issues in play in this park.