All Forum Posts by: Connor Cogdill

Current $285 lot rent* 11 lots=(3,135*12)* .57=21443

$21,443 NOI/600,000=3.57% cap currently. Which is horrible even at $400 lot rent.

I offered 600k 20% down 7% interest 7 year ballon and they declined it. So maybe a blessing in disguise. I guess for the overall market everyone just looks at them as lots only and not the what if plays and having a ton of section 8 paying you. 

 @John Sayers Maybe so. Is that going off the rule of 50% expenses? I’ve seen in some mobile home deal analysis that seems to be the off the napkin approach to MHP analysis. 

 I’ll check it out! And run my numbers to see what it would look like with just lot rents alone.

Asking $600k
11 Spaces All Occupied

8 TOH- $285 per month
3 POH- $1300 (Section 8), $900, $750
Single Story House- $775 monthly
Gross Monthly Income- $6005
Gross $72k

Without Due Diligence-Owners Expenses: Maybe $200 per month insurance, $150 for electricity for the Well Pump, $100 for the Trash bin, Taxes $2400 per year (currently), 
Fixed Expenses= $7800 yearly

Variable Expenses
8% Vacancy-$480
5% Repairs-$300
5% CapEx-$300
=1,080 Variable Expenses Monthly.  $12,960 yearly
I may be way under for expenses, especially with septic.

$72,000-$12,960= NOI $59,040

59,040/600,000=9.84% Cap
 
This park has dirt roads, 3 septic systems,  1 well pump.   

3 miles away two MH parks have city sewer and water. Paved Roads, $600 lot rent. One of the two parks offers free utilities but tenants have to bring their own trailers(It's newly built), The other park has its own trailers $600 lot rent-utilities not included.

I would increase the lot rent up to $400. I would increase all the POH to $1300 rent.
Extra $1,479 a month income from the POHs. Extra $920 from TOHs.
Extra 2,399 per month, $28,788 yearly.

If people moved out could have more Section 8 or veteran tenants. More Maintenance but more cash flow.  

New Estimate:   87,828/600,000=14.6% Cap.   87,828/.0984=$892,560 value at old cap rate.

Would partner with my twin brother. Could I be 4 hours away from an MHP that has septic? My family owns a couple of parks but none with septic before.  My brother would be in the same area of it all the time. I can always drive the next day.  Is this idea realistic?