Mobile Home Park Help

[Joshua D.]

7 Unit mobile home Park  asking price of $ 240,000

I would self manage and there are no park owned homes 

Lot rent is $300 a month $2,100 total monthly

Property taxes are $1,300 a year 

Insurance is $500 for liability on land 

Electric for well and septic pump house are $50 a month.  

Well and septic are in park.  

Loan terms are owner financing at 4% fixed 30 year amt, 15 year balloon 

Retiring couple wants to move to Florida and just have passive income...  

 Is there room in this for me to win???

[Curt Smith]

Hi Joshua,  The accepted formula for a park offer for 100% lot rent is:

$lotrent x 12 x paying pads x 0.7 (30% expense ratio) / 0.1 (10% cap rate) 

in your case: $176k max offer price.  Your park is way way over priced.  

Offer low, once you own it and it cash flows better they you are the winner.  Max I'd offer is $176k.