45 Space Mobile Home Park Under Contract in Marion SC

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Hi Guys, have first MHP under contract (I'm full time fix and flip single family guy in DC area). Would really appreciate any comments/thoughts/suggestions... or 'dear god man run away from that park comments...'

  • Price is $275K, he won't carry anything back
  • 45 spaces
  • 12 lot rent
  • 28 park owned (would sell those to tenants on owner financing/rent to own to get to lot rent)
  • 5 Vacant
  • park homes rent currently $400-425
  • lot rent currently $125- I think market is 175-200, but not many parks around so has been hard to get numbers
  • 3 bed houses rent in nearest large(ish) city of Florence SC (30 mins away) rent for $800-900
  • city water and sewer
  • small park footprint wise, just 2 roads- 1 paved 1 dirt- and all houses in the middle of it, very small footprint, tight park
Area:
  • Marion SC, super small town, but is 10 min from super walmart, 30 min from Florence, that is the nearest MSA (technically Marion is not in one)
  • Marion small, slowly dying town; Florence growing, solid city/town
  • Florence metro good growth since 2000, like 17%, low unemployment, everything looks solid there.

Numbers:

  • I am pro forma-ing it at $150/space lot rent, 40 spaces, $6K/mo, after 45% to expenses is $3,300/mo net/mo... which is $39,600 net/year
  • 14.4 cap on property pro forma
  • 12 cap on property based on 125/mo lot rent at 40 spaces. However, neither current nor pro forma numbers include the value of the 28 POH that we will be getting as well and selling on owner financing back to the tenants. It also doesn't include the bump in rents we'll get for 4,5,6 years while those park houses are being owner financed to tenants.
  • My biggest question mark is the little town it's in. I'm unsure if should be concerned about slowly dying immediate city is in. Florence is where most people work from my understanding. Diversity of employment in florence seems pretty good for smallish city/town. 

The numbers look really good I mean less than $10k per park owned home ++ a ton more..

If I was to buy I would spend a couple of bucks for someone to evaluate the local economy in that town and in Florence.. 

I hope someone who is familiar with that area will chime in