Hello, I am a new MH real estate investor in South Carolina investigating my first potential deal. I have a feeling that the price may be too high, but was looking for feedback.
The park has:
19 mobile homes, 10 are rented, all park owned homes
a triplex unit
space for 6 more mobile homes (along with land for another 10 with development)
I have valued the triplex at at 13 cap and based on an expense ratio of 30%
The 10 rented single-wide mobile homes would command a lot rent of $175 with an expense ratio of 30% and a 10 cap
((175*10*0.7*12)/0.1) for the 10 rented single-wides: 147k
The remaining 9 mobile homes have only minor repair work to re-rent and I was willing to pay 1/3 of their value (again at 30% and a 10 cap)
((175*10*0.7*12)/0.1)/3 for the 9 un-rented single-wides: 43k
The 19 mobile homes could easily be sold for 5k, so I'd give 1/3 of the value of these homes; 32k
No value as been assigned to the lot and potential expansion
Total Valuation: ~320k
-Is this valuation reasonable or should I really assign no value what-so-ever to park owned homes?
-The park owned homes apparently are not titled. What problems (if any) will that cause?
-The owner is under the impression that the mobile home income should count for something. What do you believe is the best resource to counter this?