Mobile Home Park Analysis
So I met a guy that was speaking at my local REIA about landlording. I went specifically to speak with him because I knew he had a MHP and Ive been looking into possibly investing in this. So, come to find out he wants to sell his park and use the money to upgrade to a larger park.
It's a 12 lot park, with 11 lots rented. He said he keeps one strategically vacant in case something happens to a tenant's septic, he then has a place to move the trailer. So, 10 lots rent for $250/mo and 1 at $350. Total yearly income is $34,200. Operating expenses of taxes, insurance, electric, legal, repairs/maintenance & vacancy were listed at $7892. (23%)
He is asking $220,000. I know there is much I need to investigate about the park, but from a numbers perspective, would you proceed or pass?
What are your thoughts on leaving one lot vacant as 'insurance' against an issue with the septic?
I'd have to get a mortgage to purchase. Ive seen anywhere from 20-35% down, but haven't seen advertised interest rates, what can I expect? I just need a ballpark to plug into my figures. I am using 7% now, but wanted to get a better number.
Your feedback & advise is appreciated.