How do you explain to mom and/or pop that their rental income is of no value? Pop died a few years ago, mom is in her 70’s and is ready to sell her 70 space park that includes 11 park owned homes. The rent she is collecting is from these homes grosses $65k after deducting lot rent. Seems to have a very stable customer base, with only 1 or 2 turnover annually.
She wants me to make an offer. She has 64 of her 70 lots currently occupied at an average of about $160/mo. City water, sewer and streets, all paid by tenant. I know that when I give her an offer based on the lot rent alone, I will have one angry lady on my hands as she tells me she “makes” $200k per year with the park (roughly lot rent + home rent). Her “makes” in reality is total revenue.
I understand the math, but if I were in her shoes, and did a quick google search, it will be inconclusive. Not to mention, nearly every listed MHP you run across on the internet includes the rental income as part of the valuation. That’s strong evidence for this “mom” to balk at my offer.