Shifting into Park (Mobile Home that is)

I wanted to write a blog about our first mobile home park that my wife and I are in the process of purchasing. This first blog will be a run down on the property and why we like it. As we go through our processes I will keep these updated as a walk through on our progress towards owning the park. Hopefully I can make this interesting and entertaining and most importantly bring value to those who stumble upon and read this. 

 The property is an excellent stabilized park with 35 MH spaces and 1 RV spot. It's a sexy property to say the least. Very long term tenants, no major vacancy issues, well kept and the owners have been a delight to deal with. It's got 19 park owned homes (3 need rehabbed)  and 11 tenants that own their own homes which gives us a 77% Occupancy rate.  We currently have the property under contract for $429,000 with the offer being contingent to the park having 30 qualified and performing tenants prior to the date of close. Currently lot rent for the park is at $125 and the average rent for a home is roughly $395.  That means the gross rents should be in the area of $92,340 in it's current condition (this does line up with P/Ls and tax returns we have received) please keep in mind this is based on current numbers and does not include the additional 3 tenants we shall have prior to closing and of course this however does not include vacancy, credit loss and all other expenses. The tenants pay for their own water and sewer and the property has low turnover which are nice for the expenses. Based on the P/Ls we received the property has about $44k annually in expenses which brings our NOI to $48,340 and gives us a cap rate at purchase on the property of roughly 11.3%. 

As we move forward we will and have run into challenges on due diligence, financing and when the time comes management. I am excited to be detailing this journey and am looking at this blog as a baby book of sorts for our real estate investment journey. Thanks for reading and I look forward to getting everyone another update soon!

Ryan