Hi,
I am new to this forum and just getting started in mobile home parks. Could someone please give me an idea of a bad, good, and best scenario for a cap rate on a 12 unit mobile home park. This park owns all the mobile homes (no “lot rent only” spots) and they are pretty old and will require maintenance. Thank you in advance for your input.
A very difficult question to answer due to all the variables at play. POH MHPs are fraught with financial risk as the routine maintenance, delayed maintenance and the unknown maintenance issues can utterly overwhelm your gross income, Now for full disclosure I have a lot of POHs in one of my parks and we enjoy a tremendous revenue stream from these rentals but we stay way ahead on the maintenance both routine and planned. Best, least expensive fix is early fix.
I think providing guideline cap rates in this case would be inappropriate because we would be providing guidance without all the necessary information- particulary pending and unknown maintenance costs.
One of the core principles of many on this site is in any POH park base your offer only on the pad rental portion of the annual revenue. Personally I don’t always agree with it but in this case it may be the best advice to offer. Given that and what you have described with the park I would think with just the pad rental as gross revenue you would still want to be north of a 10 cap before doing any heavy due dilligence. Others opinions may vary.
With a little maintenance and some on going planned maintenance this park may pencil into a great investment or you could find yourself in a money pit paying for the prior owner’s greedy lack of maintenance.
Be careful and always look both ways before crossing the street. 
Thank you for your feedback, Propboy40, very much appreciated!