Help on MHP evaluation


#1

Hi All,

What value do you add to a park when notes go with it? They are asking $105,000 but that seems high to me?

Thanks,

Barry

Spaces: 12 spaces - 5 vacancies currrently

Current Occupancy: 7 singlewide homes, 1990 or newer, 3 homes are park owned

Lot Rent: $85.00 per month - (market is $100)

Payments: tenants mail in money orders / due on 25th, late on 1st, evict 12th

Notes on Homes: 3 homes on lease with purchase option

                               Mobile 1:    1997 Oakwood 16x80 Purchase price $15k 10 years @ 13.25% Pays $215/mo created August 2004

                                Mobile 2:     1998 Oakwood 14x70 Purchase price $19.5 15 years @ 11.5% Pays $215/ mo created February 2006

                                 Mobile 3:     1997 Palm harbor 14x70 Purchase price $20k 15 years @ 11.5% Pays $215/mo  created January 2006

Utilities: City water and sewer, residents pays all costs

Trash: City provided service, residents pay all costs

Taxes: $180/yr total = Property Taxes $120 per year / License is $60 per year

Operating expense: Grass mowing vacant lots - $500. per year

Current Revenue: Current with vacancies - $7140 lot rent plus $7740 from notes for total $14,880. (annual)

Total Expenses: We pay - $180 taxes and license, Mowing $500, Liability Insurance $360

NOI: 13,840 current - Pro-Forma is an additional 18,000 or $31,840 total annual


#2

Barry,

The note values must be computed using a financing calculator by discounting to a rate of return you are comfortable with. In most cases, my comfort level on notes in a park is between 18-21%.

Steve