All Forum Posts by: Matt Matyas

Hey Jamin - long time no chat! A general valuation formula many in the industry use is: 

# of economically occupied lots * monthly lot rent * 70% (assuming 30% of income goes to expenses, common for parks on city utilities) * 12 (months in a year) / desired cap rate

For this park at a 10 CAP (many parts go for lower cap rates now, but small parks might still go for a 10 CAP), that makes: 21*298*.7*12/.10 = $526K . 

This is a ballpark number, but paying somewhere around there feels fair. 

Thank you both! I do agree in the wisdom of inspecting the homes as some of them very well could end up in the park owner's possession. 

I'm in the process of purchasing a mobile home park. It comes with 8 mobile homes (most are only 1-3 years old) that were purchased by the park; the park owner holds title to these. The 8 mobile homes are on lease-to-own contracts with the existing tenants, and the homes were positioned to the tenants as effectively being their homes; if all goes well, the tenants will make all required payment for 10-15 year periods, and will gain title to the homes at the end. Though if there were a default in the meantime, the park would repossess the homes. As a buyer, would you require an inspection of such homes?

Thank you both; I'll follow up with the local health department.

Does anyone know what the options are to replace failed leach fields? I'm under contract to buy a park, and it has 2 active leach fields; one is 40 years old, and the other is 50. Both work presently. Each is big enough to service the park, but given their age, I'm expecting them to fail at some point in the future. I'm wondering what the options are when that happens. The advice I've seen is: find somewhere else to place a new leach field. In this park, there is nowhere else, minus decommissioning 4-6 occupied mobile home lots. I've heard it's possible, though costly, to dig up and remove all of the bad dirt, and replace it with new clean dirt. Does anyone have insights on this or other options?

For real estate investors using property managers: has anyone ever had their property manager request your landlord insurance cover the property manager too? I just had this request come in; I've worked with a few other property managers, and have never encountered this. I'm curious to see if others have experienced this, and if it's common practice. For context, the line in the contract reads: "Landlord agrees to name Broker as an additional insured on all policies."