I am looking to purchase my first MHP, but keep coming across parks in my area where owner is capitalizing the POHs. I have made one offer (very low) with no counter through a broker and will make another since it is still listed. Id like to know how you all find a way to make these deals work out. Below is info & my calculations for offer. My goal is to acquire a solid MHP to keep long term. I am not concerned with doing
Avg Lot Rent (Area): $325
Avg POH Rent: $639
Water: City, Tenant Paid
Roads: City Owned
Trash: City, LL Pays
With exception of 1 new home, all homes are in poor shape on outside, but occupied on inside.
Owner just increased rent by $50 three months ago.
Most all tenants are long term.
My Max offer:
$300 lot fee * 20 lots * 12 *70% = $560K
POH: $104K (One home is new and valued at $35K)
Final Offer: $664K
Goal would be to increase rents by a small amount, fill in a few vacant lots, use rent credit/21st Mortgage, and sit on it with minimal expenses.
How do you view this offer and what would you do different knowing that Seller is “proud” of his rent with POHs?