Updated over 6 years ago on . Most recent reply
Mobile home park evaluation
Hello, new investor here and I would love some help evaluating a deal. Local mh park right down the road from my house, 10 old park owned mobile homes, small run down 6 apartment building, small stick built cabin. All rented between $350-550 per month. Current net income for sellers @ $55,000 without a mortgage. The park is 4.5 acres zoned fo 8 units per acre. Good location B area, but the park itself is a C. Water is well, sewage is city. What would you offer here? How would you turn this park around? Looking for possibilities and opinions. Thanks!
Most Popular Reply
Sounds like it good be a good deal. $55k NOI means at $550k that's a 10% cap rate. You've got to back out repairs and the homes are of no monetary value. In fact you may end up finding that they cost you more to keep maintained and rented. Either replace them or owner finance them out.
Even though it 8 per acre zoning wise, that doesn't take into account roads and other required setbacks, parking, etc.. What are the other parks in the area charging for lot rent? is this one below market?
With owner financing I'd offer $250k as you're going to need some funding to do repairs and upgrade the apartments. That's a small number to manage so you probably wouldn't need a full-time manager - are you self-managing?
Interesting little deal. Curious to see how it plays out.