Mobile Home Park Investing Opportunity

mobile home university
1

I have a chance to investing in a park. Here is what I know;
Community Type: All Age
|Number of MH Lots: 6
|Total Occupancy: 100%
|Size:|2 acre(s)|
Gross Income $49,900
Operating Expense $16,711
Net Operating Income $33,189
Expense Ratio 33.5 %|
Investor opportunity in growing area! 6 mobile homes on 1.66 acres. Property is zoned commercial. All units are leased. Four of the units are 3 bedroom, 2 bath mobiles. There is one 2 bedroom, 2 bath mobile and a 2 bedroom, 1 1/2 bath mobile. City water. Each unit has its own conventional septic system and a storage shed. All units well maintained.
Asking $600K I think the asking price is too high and I know nothing about septic systems.
Water: City
Water Paid By: Tenant - Individual Service|
Sewer: Septic

The Homes dont look too bad nothing to rehab but no amenities.
Looks like each MH will bring in $5,531.50 a year making the lot rent $460
So if asking is $600K its gonna take me 18 years to break even, doesnt sound worth it? I would love any suggestions.

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$50k in gross income/year means $700/month rent per unit on average. A total expense ratio of 33% for an all POH park is likely low. The lot rent is not $460/month – that’s the seller’s claim for total monthly NOI/unit, not lot rent, and not lot rent NOI.

If I make a more reasonable assumption of $300/month lot rent (meaning $400/month home rent), use a 30% lot rent NOI expense ratio, and value each home at $25k, then at $600k asking price this park is at a 3.4 cap on lot rent NOI. Unless there’s some upside not being factored in that’s going to allow you to triple your NOI, this is crazy expensive for a tiny park.

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