Deal analysis- 36 lot park with 5 TOH and 31 unoccupied- Would you buy?

Can you help with general feedback and guidance on considering this opportunity not yet under contract? I have a lead on a 36 lot mobile home park on 16 lots and each lot is accessible to the county roads and has its own driveway. Park infrastructure is 50 years old. Only 5 of the 36 are occupied. There are 24 trailers than need to be removed and 7 vacant lots. 24 need to be removed to make way for infill. Each lot is on septic and shared well. There is one active well serving the current residents and 2 others that are inactive that I imagine will need to be brought up to serve the remaining lots and/or provide redundancy/backup. Septic condition is unknown but trying to get more info from local servicers(will need to inspect during DD). The nearby City sewer does not go out this far so I wouldnt be able to hookup to municipal water/sewer.

Town is population 12k and closest major city is Macon, GA. Population has seen a decrease of 13% in last decade, but has been relatively flat. Vacancy is 10%. 55% renter community.

Seller (flipper) states NOI of 8832/year (based on 5 units at lot rent of 200-250). Using 6% cap rate and 8832 NOI, I get 147k valuation. Seller wanted 210, but willing to accept 152k so far, but I have yet to break the 147k valuation based on current occupancy.

Work needed:
remove 24 old trailers
landscaping on vacant lots
upgrade infrastructure to connect lots to wells if leaks present (vacant lots make big unknowns)
infill with used single wides (figure 10 per year for 3 years to fill all 31 unoccupied lots)
pump or repair septic where needed (DD TBD)
bring online 2 additional wells for redundancy and connect to existing lots

Post infill NOI after 3 years is about $47,500 based on lot revenue of 81,000 (75% occupancy). If I go through with the deal, I’ll use my own capital and offer 50k down, with 100k on 5 year note @ 6%. ($1933/mo). cashflow is $24300/year.
This doesnt include the capital to remove, buy, place, restore used single wides, and up front capital to address other deferred maintenance.

acquisition:

150k purchase assumption
50k down 100k 5 year note, 6%- 1933/month
50k down
12.6k septic inspections DD
500 well DD
5000 boundary Survey DD
4500 Agent cost

year 1 one time capex costs:
15 unit pumping- $5250 plus additional maintenance costs
demolish 10 units- 3k x 10= 30k
buy 10 used units- 15 x10 = 150k
estimate well maintenace and or bring additional existing well back online- $10k
lot plumbing improvements 10k
=206k first year capex cost

50k down plus 176 first year capex plus 23k DD= $279k acqusition cost
Year 1 will be 8k NOI - 11.6 debt (6 months deferred payment)= -3.6k
beginning year 2 would be 57.8k NOI- 23.2k debt=34.6k Cashflow (10 new units infill)
beginning year 3 would be 120k NOI- 23.2k debt=96.8k Cashflow(10 additional new units infill)
beginning year 4 would be 172k NOI- 23.2k debt=149k Cashflow (11 additional new units infill)
stablized NOI, convert most units to TOH with NOI-47k – 23.2k debt= 24.2k Cashflow

***breakeven at end of year 4

Could keep half of park POH for additional revenue and better NOI…

Or could add meters and bill separate for sewer/water from wells…
Does this plan have too many risks? Is the private well/water too risky given age of the property? Does it seem like alot of value-add work for a mediocre cashflow once stablized at after year 4?

Thanks in advance!

Sounds like you have a chance for a nice double-up or even triple-up.

Once full this park could be worth $700-800K or even more.

I think some of your numbers are optimistic. IE cost to rehab a well, pumping costs, septic repair costs, and the cost to install used homes. I am not from GA so I do not know the prices out there, but your estimates seem low to me.

For your Offer, see if you can get 6% interest only.

Also, on the Septic Pumping, likely you will not have to do all the pumping in one year. You will only need to do the pumping etc once you have a home hooked up to the septic system. No sense in pumping a tank that will not be used for 2 years. Plan this out so you test/repair the system before you put any homes on it and use all the spaces attached to System 1 before you start on System 2.

POH income is a trap. The income is higher, but so are the turnover and maintenance. It looks good on paper but is not as good in reality.

Based on the age of the park, I would like to know what kind of water and sewer pipes the park has. Clay, CE, ABS, etc.

It would also be nice to know how long each septic system has sat unused. A leach field can recover to nearly 100% rejuvenated if it sits long enough. Definitely inspect each tank. Those old tanks are probably poured-in-place concrete and could be failing. I would want to be sure the lids are not crumbling. The last thing you need is for some kid to get trapped in a failing septic tank.

Do your DD and make the best-informed decision you can. The Cost-benefit of doing this deal is unique to you.

Would I do it? No. For me, it would be better to spend the $300k buying a bigger park that actually makes money on day one. I hate buying deals that lose money. I have one right now. I am spending $20k a month to fix it up. Looking back it would have been better to invest the money into a deal that cashflows on day one.
Do I have friends that would do it? Yes. I am pretty conservative, but I have some MHP buddies that do all kinds of deals out of my comfort zone. They are VERY successful.

You will need to MAXIMIZE the “Blockade FACTOR” ie your willingness and ability to kick butt and get 'er DONE!! (I don’t know your name so I used Blockade).