Hello,
My partner and I are in the process of getting an off-market mobile home park under contract. The park has 19 lots, a 4-unit building, a 3-unit building, a two-car garage, and a one-acre lot fenced in and ready for expansion. 5 of the mobile homes are park owned, 9 are tenant owned, and 5 have been converted to RV lots. All lots are on city water and sewer. All units are individually metered but the current owner pays all the utilities.
The park is located about 1 mile from the local city business district and is within 30 minutes of downtown Cincinnati.
All but one unit is currently rented out. The seller does not have leases in place and several people around the park help run it. This person is older and interested in selling and getting out of the game after 30+ years of investing. Most mobiles seem older but the park is not run down and the streets are clean.
We would love to purchase this property and slowly stabilize by charging the tenants utilities and bringing rent to market value, however, we have no experience with this. We have a limited expereince with single family flips and multifamily rentals but this is much different.
My analysis shows that the current NOI looks to be around $68k including 5% maintenance and 10% for management. My question is, being in the midwest and given the fact that this property probably needs some work, what value based on Cap Rate could we expect to get for this property once stabilized? We are debating how to proceed. We are considering an assignment of the contract and just making a fee because it seems like a lot to handle.
Additionally, the fenced lot seems like a fantastic opportunity to develop self-storage but again, we have no experience. (There is a relatively new self-storage about 2 miles away.)
Thoughts?
Thank you for your thoughts!
Brandon Miller