Evaluating apartments and commercial buildings w/ MHP


Apologies if this has been discussed before

I am evaluating a deal that is a mobile home park AND a building that consists of a commercial bottom floor (auto shop) and 4 apts on the top.

My question is what expense ratio should I apply to these assets and how should I evaluate their potential NOI?

All thoughts appreciated.



I don’t believe you have to get that complex. In 9 out of 10 times this is a mobile home park so the additional commercial properties are about the same class as a MHP. There is seldom a time where a class A office or Apt is going to be sold with a MHP. So I usually view it all together since you are buying all the parcels together. I would review the owners numbers and also with the site visit review what its costing to maintain that portion of the park. Apt are pretty easy to evaluate and you know what rentals go for. So you can value those easy. I usually discount the rent and value of the Apt and commercial since there is usually more turnover here and cost to maintain. But for the most part, analysis should not be overly complex.


TY. I agree with your assessment. More-so wondering what expense % do you see with apts or a commercial building for an auto shop (if anyone has experience). Assuming utilities are billed back.


Class A,B Apt and commercial are usually close to 50% on expenses. However, you will probably get away with lower on these. Usually this is low income housing so their expectations are not great.


Watch out for environmental issues with body shop- oil and gas spills - lenders/ buyers want inspections. Commercial lease frequently are net with tenant paying most of expenses