1st Deal - MHP Valuation

Looking at my first MHP deal. Here are the stats:

29 total lots

  • 15 lots rented at $350/month
  • 8 vacant lots
  • 2 park owned homes rented for $450/month
  • 4 vacant park owned homes

I know this can be valued a variety of ways. Net Operating Income for previous 8 months (Jan - Aug) is $27,000. Annualized would be about $40,000.

It has city water and sewer.

How would you go about valuing this park. I’ve come up with anything from $340 - $500k. Price Is $375k.


I would value it at 17 lots collecting $350/month and determine a reasonable value for the 6 POHs based on what they can be quickly sold for. With POHs rented at only $100 above lot rent they are losing money every month. It is important that the cost of maintain these POHs be deducted from your monthly income in calculating the over all value of the park.
Determine a cap rate that will make the purchase profitable based on a adjusted income and anticipate lowering the value somewhat to allow for deferred maintenance.

I agree with Greg with one exception. After you determine what the 6 POH’s can be sold for subtract 25% or so. You deserve to make a few dollars selling them.