How do I price this park

mobile home university
1

I’m negotiating on a park in the midwest. It has about 90 spaces. 62 have homes, about 30 of those are rented. There are 31 travel trailers in the other spaces. The park is very mismanaged. If I look at lot rent only of about 150-200 the park is losing money every month. Expenses are out of control! I would usually give a shell value to the mobile homes; of the 62, 11 need to be junked. But how to I assign a value to travel trailers. I wouldn’t want to keep them in the park and sell them because they could just pull out with no problem. Do I count the rent but don’t assign a cap rate to it?? There are ZERO tenant owned properties at the moment. I think it could be a great turn around with A TON of work and bringing in and selling newer homes. In a decent area with nearby population over 100k. I’ve felt pretty confident in all my past valuations, but this one has me very uncertain. Any help??

thanks

2

@Scoundrel8 Let me see if I have your numbers correct here:
90 total pads
28 are vacant pads
30 are POH (park owned homes) and 11 of the POHs are junk?
32 are RVs

I would research what a 2-3 bed apartment rents for per month - take half of that and that is what you could get in lot rent.
Also, call local parks and ask them for their lot rents and rental prices and map that out.
With these numbers it should give you a pretty good idea of what the area is going for.
Also check to see the school district the park is in, why is everybody seem to be leaving.
What is your business plan - keep as POHs, turn park into tenant owned units, or a combo of the 2? That would point you in a direction at least.

Hope that helps
Pat

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