Need help evaluating my investment 🙏

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Need help evaluating my investment 🙏

Narayana Apparel
Member since 2026 · 4 posts · 0 votes

I own mobile home in North Carolina that's located in a park on rented land. I bought for a deal because of the terrible state it was in. Got it all fixed, looking pretty nice and added appliances washer dryer etc.

Leaving it as a large 3bed 2 bath, I was getting offers for $35k-$40k.

But I figured I want to rent by the room (the local area has enough demand for low cost affordable housing). I split the house and it is now:

- 5bed 2 bath.

- Each room has rented for $560 + $40 utilities

- Grossing $3,000/month

💰NOI approx: $1,445 ($17,340/yr)

Evaluation:

💰 Conservative 16% Cap Rate: $108,375

💰Slight Premium 14% Cap Rate: $123,857

* Property Manager takes care of it all including maintenance, Owner pays Utilities, 1980 build

❓MY QUESTIONS: ❓

- Are Investors out there interested in an asset like this?

- Do you guys think this sale is feasible and realistic?

- What should I be keeping in mind while trying to develop this strategy and eventually selling?

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  • Dan H.Pro Member
    Investor · Poway, CA · Member since 2015 · 7k+ posts · 8k+ votes
    2mo
    Quote from @Narayana Apparel:

    I own mobile home in North Carolina that's located in a park on rented land. I bought for a deal because of the terrible state it was in. Got it all fixed, looking pretty nice and added appliances washer dryer etc.

    Leaving it as a large 3bed 2 bath, I was getting offers for $35k-$40k.

    But I figured I want to rent by the room (the local area has enough demand for low cost affordable housing). I split the house and it is now:

    - 5bed 2 bath.

    - Each room has rented for $560 + $40 utilities

    - Grossing $3,000/month

    💰NOI approx: $1,445 ($17,340/yr)

    Evaluation:

    💰 Conservative 16% Cap Rate: $108,375

    💰Slight Premium 14% Cap Rate: $123,857

    * Property Manager takes care of it all including maintenance, Owner pays Utilities, 1980 build

    ❓MY QUESTIONS: ❓

    - Are Investors out there interested in an asset like this?

    - Do you guys think this sale is feasible and realistic?

    - What should I be keeping in mind while trying to develop this strategy and eventually selling?

    Cap rate has no bearing on value of a mobile home so eliminate that thinking.   If you want valuations based on cap rate and NOI, purchase commercial properties including residential or more than 4 units.

    do you have a property manager that will manage rent by the room or is this exploratory?  In my San Diego market there are few PMs that offer this service and their rate is significantly higher than traditional LTR.  In San Diego, the rent by room rate is virtually double the traditional LTR rates.

    is a sale possible?   Yes but it will almost certainly be based on comps and not NOI, cap rate.  

    what should you keep in mind?  This is not a comerfial property.   In addition mobile homes typically have valuations far below traditional homes.  Your best play may to keep this for its cash flow especially if you have a pm that will manage this scenario at a rate comparable to traditional LTR management rates.

    good luck
    0Reply
  • Drew SygitBusiness Member
    Property Manager · Royal Oak, MI · Member since 2012 · 12k+ posts · 9k+ votes
    2mo
    Quote from @Narayana Apparel:

    I own mobile home in North Carolina that's located in a park on rented land. I bought for a deal because of the terrible state it was in. Got it all fixed, looking pretty nice and added appliances washer dryer etc.

    Leaving it as a large 3bed 2 bath, I was getting offers for $35k-$40k.

    But I figured I want to rent by the room (the local area has enough demand for low cost affordable housing). I split the house and it is now:

    - 5bed 2 bath.

    - Each room has rented for $560 + $40 utilities

    - Grossing $3,000/month

    💰NOI approx: $1,445 ($17,340/yr)

    Evaluation:

    💰 Conservative 16% Cap Rate: $108,375

    💰Slight Premium 14% Cap Rate: $123,857

    * Property Manager takes care of it all including maintenance, Owner pays Utilities, 1980 build

    ❓MY QUESTIONS: ❓

    - Are Investors out there interested in an asset like this?

    - Do you guys think this sale is feasible and realistic?

    - What should I be keeping in mind while trying to develop this strategy and eventually selling?


    Go try to get a loan based upon your cashflow.

    Doubt you'll find a bank that will recognize anything but the market value of similar properties - meaning just other mobile homes.

    Why do you want to sell if it's making this much cashflow?

    [email protected]248-209-6824
    Logical Property Management4.9450 Reviews
    WebsiteView Page
    0Reply
  • Ryan SpathBusiness Member
    Real Estate Agent · Boise, ID · Member since 2017 · 554 posts · 374 votes
    2mo

    you have a trailer on rented land the owner can increase the lot rent and totally kill the cash flow, this is why it is less desirable. Also, the value is based on the other comps in the park, Cap Rates are for 5+ units. Lending can be more difficult on this type of asset, espically if it is older... If it is a cash cow for you, "let your winners ride!" 

    [email protected]208-600-2814
    0Reply
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