Anyone here use this? Here is the situation. I have a park on a pretty decent chunk of land that I’d like to investigate. I’ve done a few Lonnie deals already so I know some of the ins and outs of those.
Is the Park Evaluation software on this site enough for me to get a feel for the parks worth? Or should I be looking to use that as a supplement to the course offered? I just want a ballpark figure at this point.
Park has 8 lots but 11 acres. Has a stickbuilt house on it as well. It’s older, probably built in the 70s or early 80s. They are asking $109000 on it right now. I’d like to see where the value really is.
1 or 2 lots are vacant. Another is a vacant park rental unit. Others have the typical Smoky and the Bandit Firebird parked on the lot with a tire missing type of situation.
It doesn’t matter if it is a 2 lot park or a 400 lot park due diligence is the only way to determine value. The evaluator has been fairly close on some parks I have looked at, others not so close. Can you split the home off? whats it worth on it’s own? lot rent? sewer or septic, public water or well? operating legally as a mh park or not? etc. etc. etc.
Due Diligence is the process of evaluating an opportunity before purchasing to be as confidant as possible that is is the right move for you. It is part science and part art. It is a dynamic process of assessing if the risks are worth your perceived return. MHP Evaluation software is more science then art so it is only a part of the DD process (sometimes it is more confusing then useful as all software is a form of modeling and not all projects fit into that model).
There are a number basic principals that must be evaluated before purchasing a cash flow asset (there are more but this is a good start):
Asset Value (price) to you by examining past, present and a forecast of the future.
Cash flow values (payments after expenses) to you by examining past, present and a forecast of the future.
How cash flow effects asset values and vise versa.
Your assessment of the Risks (vacancies, population migration, infrastructure, maintenance, environmental, tort issues, interest rates, government obligations, etc. etc. etc.) .
You also need to assess the likely direction the market will look upon your investment when you choose to no longer own the project:
Market Asset Values go up, down and sideways.
Market Cash Flows can be positive, negative or break even.
Perceived risks from the market.
All of these are dynamic and change during your holding period.
The goal for you is to build your own “toolbox” in order to assess these things to your liking. You can fill your toolbox through education - books, websites, seminars, mentors, evaluation software, boot camps, the hiring of professionals, just to name a few. I also suggest evaluating your purchase strategy, holding strategy, and exit strategy - before you buy! Your comfort will be different then everyone else - hence the “art of the deal”.