Investor · Minnesota/Wisconsin/Iowa · Member since 2019 · 49 posts · 77 votes
Hello everyone,
I'm in negotiations of a mobile home park deal, this would be my first mobile home park. I wanted your impression on these numbers.
Rents: $13,095 per month.
Financing: $4910 per month.
Expenses: $4000 per month. (For insurance, taxes, landscaping/street maintenance, and park manager, well/septic)
This means, $4185, profit per month. Or $50,220 per year. My down payment will be about $140,000. So about a COC return of >33%, what are you guy's thoughts? I know lots of you have more experience on this. The homes are all park own besides 4 which are under contract to own.
Thank you for the reply! I now have this park under contract, pending inspections of the Septic and Well. (Private Septic and Well).. Which is the worst part of the deal for me considering I have just never managed one before. And I will need a good inspector to give me detailed instructions, so I will be there with him during the inspection.
Park is not listed on any websites, but is in North Dakota and I found this through my agent. There are 50 lots with 41 lots filled. Lot rent is about $310 varying slightly on each lot (there is an increase in rent happening next month for $20, which I did not include in my original numbers but will increase rent total by about $10,000. (The numbers in my first post did not include this increase). The area has about a $750-$800 apartment rent. I'm not entirely sure what other parks rent for in the area, I have tried to look but the websites do not list this so I may start calling the two other parks in the city. I have driven through the other parks, one is pretty rundown and the other is a retirement park with age restrictions (Have to be above 55 I believe). The main expenses are for utilities (paid by the park but included in the numbers I sent you. Total rent rolls are $155,000 (without the $10k increase happening next month), and $50k of that is set aside for the park manager (free rent + $200 per month), insurance, taxes, street lighting, septic and well maintenance and landscaping/shoveling. I have seen the 2018 and 2019 profit and loss statements that show the breakdowns of these expenses. This leaves about a $105,000 for the financing and profits. I am in an agreement with a banker for a 5.00% interest rate loan, fixed for 5 years amortized over 25 years. And so the fixed mortgage expense will be $60k yearly.
I hope this gives you good insight at the deal, do you have many thoughts on this? I do have it under contract because I believed it seemed good but I wanted your opinions.
Rental Property Investor · Saint George, UT · Member since 2017 · 54 posts · 40 votes
6y
@timothy W Hanson,
are you looking to wholesale this deal or purchase it yourself? Do you mind giving some details of where it is in ND or approx what the population of area is?