Tips on buying a mhp from a real estate agent

Trying to deal with a real estate agent, and seems like they are in no hurry just collecting bids . Any tips on making offers ? Is starting offer of 80 percent of asking price okay?

I would not base your offer on the asking price. Best is to do your own valuation analysis and determine a price based on your calculations. Otherwise, what if the asking price was way too high and 80% of the asking price was also too high? Then you will overbid.

3 Likes

mPark is correct that offer is not tied directly to ask. The catch is that you will need to feel out the seller to get a accepted conditional offer before you can do full due diligence. Sellers generally have a inflated scenes of value so make sure you have a way out when you discover your offer is too high.

2 Likes

Yes the asking price is based on a appraisal, based on the appraisal brochure the asking price is on the lower end of it say the appraisal price is $450,000 to $500,000 and agent selling price is $460,000 would offering $370,000 be a reasonable buying price?

I would not trust an appraisal. As appraisal is merely a professional appraiser’s opinion based on certain guidelines. As an investor, you need to make your own valuation based on financial characteristics that are unique to you including your projections, operational efficiency, cost of capital, etc. Appraisers do not consider this.

Also, you will find that whenever you appraise a property to support a mortgage that the appraisal price magically matches your contract price to the penny. Thus I would put zero credibility in an appraisal.

If you don’t mind, would you share some basic stats so this forum can price your property? How many lots are occupied and paying? What is lot rent? How many homes are renting and what is their average rent above lot rent? Based on that, you can get guidance from the forum.

3 Likes

The following is a example of how to calculate a 8 cap on a park. This example park has 30 occupied lots. Rent is $200 per lot. Park pays sewer and water…

30 lots x $200 per occupied lot rent= $6,000pr month
$6,000 x 12 months=$72,000 gross per year
$72,000 x .6= $43,200 profits per year
$43,200 divided by (8% cap) = $540,000
$540,000 is the most I would pay for this example park. Which is a 8 cap on this park.

1 Like

Travis has a great formula. Perhaps you may want to tweak it to match your situation, but it illustrates how simple it can be. Plug your numbers into his formula, and see how the result compares to 80% of the appraised value.

2 Likes