My first deal- mobile home park analysis

Hey Everyone! I am looking to buy my first mobile home park and have found one for sale that I am interested in.

-No Park Owned Homes
-City water and Sewer
-2 apartments
-13 owner occupied spaces, One vacant space
-Not currently sub metered
-2 acres of adjacent raw land sold with park
-Approx $40,000 of notes on seller financed homes sold with park
-Very good condition and good monthly collection
-Along the main route through the city of Willcox, Arizona.

current expenses include manager, water, sewer, trash, taxes, insurance, and security lights = 38.42% of GI

NOI: $29,188
ASKING PRICE: $295,000
Seller financing 30 year amortization with 6 year balloon. $75,000 down.
My concern is that this park is located in an area that is “Middle of nowhere” status. Population and job growth declined 1% over the past year; however, many new developments have just been built including John Deer Sales center, Massive Family Dollar, New police station across from MHP, and more.

No terms have yet been negotiated. Is this a potentially good deal? If so, what terms should I negotiate? I would really appreciate any advice, thank you so much!

What is the lot rent?, Who pays for water/sewer?, Are you including the note income in your NOI figure?

With $40,000 in note, you have park owned homes. They might be sold, but I guarantee you that the owners of these homes still have a renting mentality. Anticipate getting maybe half of these back or more.

The lot rent is $250 and the park pays water/sewer. The note income was included in the NOI.

There is another park right down the street for sale with 37 spaces, 18 occupied park owned homes, 7 occupied non park owned homes, and 12 vacant spaces. The NOI on this property is currently $73,730 and cash flow of $39,169 after estimated debt services. The park currently pays water and sewer, and rents are $240 which is below the other park’s rents. I have heard to stay away from park owned homes, so should I not even look at this deal?

You can’t include note income in the NOI. That would be a horrible mistake. I would guess that the park you are looking at is worth roughly $175k-$200k at the most. Maybe a little more with a healthy discount on the face value of the notes. At the end of the day, most Mom and Pop’s don’t screen people very well so those notes aren’t worth a whole lot.

Don’t be afraid of POH’s though. There is a lot of opportunity in turning parks around. Just make sure you only capitalize the income from the lots and pay a discounted value for notes/homes.

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15 (I’m including the two apartments here for simplicity) x $250 x 12 x .5 x 10 = $225,000. The $40,000 of notes would be completely dependent on the age of the homes and the condition. Most buyers will typically discount those notes 25% to 50% based on the reality of what the homes are worth. The bottom line is that you need to get the price down to around $250,000 or so and tie it up and do some diligence on it.

Willcox does not look bad on paper at all. It has a 131,000 metro population. The only bad stats were slightly high unemployment rate at 7.5%, and very high vacant housing at 20%. These may be fully justifiable with proper due diligence. Look it up on

You can’t count on the note income long term. Remember that the note income is short term, the mortgage payment is long term. In other words, once the note payments go away, your mortgage payment stays the same.