Evaluating MHP with 51 owner-owned trailers

[Abraham Anderson]

I had a deal come across my desk. MHP has 57 spaces (of which 51 trailers are owned by the park), 100% occupancy, average rent is $500/month, city sewer/water, they pay all utilities, plus they pay the grass cutting bill. The only bills the owner has is taxes/insurance, as well as property management/maintenance.

My question is how to evaluate this deal; Do I base the value solely on the lots, or do I include the entire $500 which includes lot & trailer rent? For the 6 pads with tenant-owned trailers, it's $200/month lot rent.