MHP Deal Analysis Review

[Clint Morris]

Hey All,

Looking to transition out of SFH and recently found an opportunity that I'd like to get the communities opinion on. Below are the details:

MHP-List Price $275K

20 Acres

25 Pads

17 Lots have POH - 8 currently rented - Avg. Rent $425

8 Vacant lots - 7 TOH - Lot rent $135

City Electric

Well water - All testing past for previous 2 years

Septic system - New pumps 1 year ago

Currently has homes on only one side of private road. Told current well/septic could handle 20-25 more pads

Comps POH are renting for $550, lots at $185-200.

As it currently operates with known expenses (taxes, insurance, licensing, testing, etc.) as well as POH Maintenance, PM, and other CAP EX, I'm showing it as a break even investment.

Would very much appreciate any additional insight the BP community is willing to share.

Thanks,

Clint

[Chris Pellicone]

Quick analysis 

15 current lot rentals (not including the park owned home rent) at $135

15 x 135 x 12 months. = 24300 x .5 expense ratio = 12150

10 cap rate (standard valuation). 

12150/.1 = 121,500 value. 

You can add shell value to each park owned home. Factor condition and age of homes. They go from worthless to maybe 20k