I’m new here and I just bought the Due Diligence Manual on MHU and I’m really enjoying it as I evaluate a park that I think has potential in Okeechobee, FL (anyone have any tribal knowlege about this area?).
One thing I noticed is that Frank and Dave always use “Lot Rent” in your revenue calculations when evaluating a property. What about park owned homes that rent for more since the tenant is renting both the home and the lot?
Are they doing this to be as conservative as possible?
Dave Reynolds wrote in a post about estimating park value: “A good rule of thumb that I use to start with is that I take the number of occupied spaces and multiply this by the average monthly space rent and multiply this by 70.”*
And Frank wrote in the manual:
Let’s start with the revenue.
The park you are looking at buying has _____ lots at a lot rent of $______._
There are _____ occupied lots, leaving a total revenue of $______. Does this number match the number given by the seller? If not, let’s throw up a red flag right now. Something is wrong. How can this number be wrong?"_
Why leave out park owned homes that rent for more. I’m new to all of this so just trying to learn as much as possible.
Thanks in advance!