A broker has brought me a deal regarding a MHP in Cincinnati. The park is actually located within Cincinnati, and is about an 8 min drive to downtown. It is located in a B-type township of Cincinnati.
The previous owner defaulted on the loan and hence the bank took it over and is looking to sell the park. Consists of 18 lots. It also has a duplex (split between a 3 BD/2BA and an office). There are 11 abandoned mobile homes on the property that are of 1960 and 1970 models. All windows and doors to these homes have been boarded up by the bank when they took over the park. Exteriors of the abandoned homes are in fair-average condition. Interior conditions are unknown. All homes have been completely vacant for the last year. City water and sewer. The MHP was “built” in 1920. Paved roads. Bank asking for $260,000.
Market lot rent is $430-$490. Market rentals is $650-$730.
If I proceed with this, I know it would be very capital intensive to rehab the existing homes. At least 2 of them would probably have to be hauled away. I checked with the assessors office, and all of them have taxes that would need to be paid from the 2018 year (avg owed on each home is about $830). In addition, I am assuming electrical to each home needs to be upgraded.
The main reason I am considering this is because of the excellent location of this park and demand for the affordable housing would be there once the park is up and running. This would be my first MHP deal, but I own 3 other multi family properties that have been cash flowing well for years. What are the forum’s thoughts on this potential deal, assuming the risk/reward ratio involved?