One of the things that makes properly buying an MHP difficult is the lack of easy comps or even sales price transparency for the last time the park in question sold.
Yes, occasionally I do find a record of the last time it sold via zillow, and some county recorders have it all online, although it would seem to be that the trend is govt entities are worried about lawsuits and in fact are moving towards providing LESS data online.
But let’s agree at minimum that it is no where near as easy to find this info than say for say a 4-plex inside city line of a major metro area. (Unless I am in the dark, which does happen from time to time)
What are your thoughts and strategies to address this?
Thanks as always!
HPD
It’s only difficult if you’re trying to apply a single family home mindset to an investment property. The comparison approach for valuing a park is weak to begin with so it doesn’t really matter. Every park is quite unique and a comp is very much a snapshot in time to boot. I’d say comps are somewhere in the ballpark of “gee whiz” info. In fact I’m not even a fan of comps in the single family world. If before the crash people had been paying attention to what a home could rent for as a percentage of the purchase price instead of what the Joneses were paying a lot of carnage could have been avoided.
The most useful comp you need is what prevailing cap rates are in your area. Then you use the income valuation approach and bump it up against your personal needs/desires and the reality of the market to determine how much it’s worth to you and if it makes sense. Ultimately, you want to make sure you have a good “spread” between the interest rate you’re paying can the cap rate you’re buying at. Ideally there is plan for additional upside to pad the spread.