I am negotiating to buy my first MHP in upstate new york. My first real issue is whether I am getting a worthwhile deal. The two MHP’s in this deal (same seller) are adjacent - one is a single wide lot size - 66 lot MHP (9.2acres) with 44 tenants.
The other is a nicer age 55+ five year old double wide lot size - 60 lot MHP (34 acres - 2/3 wooded) with 16 tenants with mostly higher end homes.
Both have paved roads.
Both are well water and septic.
Rents are $295 in both parks.
At this point in negotiation the price is $1.5 million. Seller was diagnosed cancer 3 years ago and though recovered, she doesn 't have the same focus and drive anymore to manage and fill up these properties. I assume she’s telling the truth.
In newer park 42 of the vacant pads do not have concrete slab down although all utility lines run to each pad site.
In older park homes avg almost 20 yrs. in age although mostly well maintained (from outside view)
Currently grosses 205,000/yr.
Expenses 76,000/yr. incl. 5% mgt. fee (offsite mgt co.)
All homes tenant owned, with 4or5 in lease to own situations.
Owner will finance up to 20%
Is this a good deal?
I am concerned if I can fill up the parks and if tenants will pay rent (11 tenants have $1000+ balances owed)
I am told if I keep a couple of better repos and one new home onsite available for sale at all times, I should be able to fill vacancies.
Is this accurate?
I am at a critical juncture of the deal so any insight would be greatly appreciated.
Thanks