MH Park Numbers

General Real Estate Investing
1

Hello,
I am analizing a mhp. I have never invested in one before and wanted to get some input.

the park has 32 lots, 10 are rented, 2 trailers and a house are owned by the mhp. The lots rent for $130, the 2 trailers rent for $425, and the house is occupied by the seller but would rent for about $500. The park has a septic tank for every 2 spaces, has its own well and clorinater.

The person that owns it interited it and has never worked on trying to improve or fill it up, thus the high vacancy rate.

so the current gross income is around $2145 and then you have other costs assiciated with maintaining the water and repairs on septic and houses owned. The owner has very poor books on what she has been making and spending on the park.

So, can someone give me an idea or price range of what they would pay for this park? She is asking $157,000 and said she will no go lower than that, no way, no how, however its been on market for 3 years at around $180k and she hates the place. She crys and screms about how bad she wants to get rid of it.

I was thinking with the poor books I would go somewhere around $115k. Is it worth more, or can I at least get an idea of what yall would invest in it.

Also, will I more than likely need 20% down and if she carrys a 2nd could I do it for 100%? I know I looked at buying one a few years ago and interbay was going to do 100% with a seller carry. I have good credit and have owned rentals for years.

I appretiate the input.
Justin

2

Justin,

I also have been looking for a mobile home park to buy. This one looks like a GREAT DEAL to me, even at $150,000. At, $115,000, it would be a steal. Of course, this is assuming that you could greatly improve the occupancy and that the repairs needed aren’t excessive.

I’d buy it!

Mike

3

thank you Mike,
at 150 its a neg cashflow after I pay prop manager and the water treatment ect, but after it is filled up a little it would cashflow great at 150, that is why I was wanting to go a little less.

one of the big issues is how to finance it if we get a price we both like

4

This one looks like a good deal on the surface. I have a 15 space mobile home park that is full and am looking for another one. Depending on what part of the Country your in, a park is worth about $10,000 per space. The high vacancy rate concerns me. Has the owner advertised in the newspaper or dropped off fliers at area mobile home dealers? With a water well and septic tanks you would have to be prepared for some maintenance in the future. You might call a local pump company to get an estimate of how much they would charge to replace the pump. Septic tanks may have to be pumped out also. You would need some money set aside for things like this.
To answer your question, I might be willing to give the whole $157,000 but I would start by offering less. A $100,000 offer is in line.

5

gilligan,
thank you for the information. it is appretiated.