What do you think of these numbers

Question

I have identified a 6 unit mobile home park sitting on 4 individual lots in a gentrifying area. Lot's of new townhomes and apartments are being built on the surrounding streets. 1,600 sf townhomes are selling for $285,0000. Three of the lots are large enough to do a simple lot split with the city. So the big payout would come from scrapping the mobile homes and building town homes. The lots are zoned for this type of building already. The owner will allow me to scrape and build on one lot at a time while he is financing.

Any advise or thoughts on this deal would be appreciated.

The owner will finance on the following terms:

Purchase price - $275,000

Interest Rate - 6%

Terms - 30 year amortization, 10 year balloon

Taxes per year - $3500

Expenses per year - $2,500

Current Monthly Rent - $3,000

Cash Flow $1,250/mo

Any advise or thoughts on this deal would be appreciated.

The owner will finance on the following terms:

Purchase price - $275,000

Interest Rate - 6%

Terms - 30 year amortization, 10 year balloon

Taxes per year - $3500

Expenses per year - $2,500

Current Monthly Rent - $3,000

Cash Flow $1,250/mo

Ron Flatt · Answer

Just a thought:

Taxes roughly 300 per month

Expenses      $210 per month (sounds low for 6 mobile homes depending on age)

Current rent is $3000 per month, but did is that figuring vacancy... if Proforma is the $3000, I use 80% occupancy to be safe... Leaving you with $2400 per month

depending on your down payment- the payment will vary but you gave $1250 cash flow.... i think you are looking at probably closer to a $400 positive cash flow.

Finally, I have had the 10 year balloon bite me in the tail... At first you think you have lots of time, but it will sneak up on you... Mobile homes are almost impossible to refinance.

Just points to ponder....   I will buy a mobile homes, but usually only give value of the land.