How can I do a quick evaluation of a property to see if it is a deal?

Michael,

Yes, you definitely want to split the dirt from the homes/notes.

Here’s a quick way to conservatively value the dirt:

Example:

100 lots

60 occupied

40 vacant

\$100 per month lot rent

Each occupied lot is worth 60 times monthly lot rent. In this case, it would be \$6,000 (60 x \$100)

Each vacant lot is worth half the value of an occupied lot. In this example, it would be \$3,000

So, the value of the dirt in this example would be:

60 x \$6,000 = \$360K

40 x \$3,000 = \$120K

Total value = \$480K minus repairs.

To completely round out the whole deal, you would place a value on each mobile home or note that comes with the park and add the land value to it.

This is a quick and easy method I use all the time…called my 60 to 1 rule.

I hope this helps.

Steve

Michael,

There is also a comprehensive tool that has just been updated called the "Mobile Home Evaluator ". It will be available in December 2005. This is a great program that will walk you through a series of indepth questions. Once you have completed all of the questions it will let you know whether it is a good deal! It has received rave reviews! Look for it on the MHU Products page in December.