I’m planning to attend boot camp in September but have found what appears to be a solid deal in the mean time…
I found a 16 space (with 15 units) mobile home park that I am interested in possibly purchasing.
It is an REO property in South Eastern state
The units are currently vacant. The area has several blue collar employers such a CEMEX Concrete, UPS, two malls and also a community college and State University. Two highways intersect about two miles away.
Economy appears pretty stable but not exceptional by any stretch…
The park next door appeared to have one vacancy out of 12-15 units. (rent for those units -park owned- are $450)… Asked a tenant … Put a call into the owner too and waiting
The bank asking price $150,000
I looked at the property today, the homes look to be in good (relative… mobile home good) shape from the exterior.
I was able to see the inside of one… It needs rehab but looks to be sound for the most part.
The rest have been boarded up by the bank and look undisturbed. (Taking a tour with broker Friday to see interiors)
Most are all identical 2br 2ba 1986 models with vinyl siding and roof overs.
One is older than than 82
They’re on a bit more than an acre.
The units are on city water/sewer (not sure if individually metered) and as for electricity I’m not sure how many amps.
The only lot rent in the area I have found advertised in so far is $165 a month (seems low but will go on that for now)
Ok so… 15 units x 165 x 12 x .6 x 10
15x165 = 2475
2475x12 = 29,700
29700x .6 = 17820 NOI
17820x 10 = $178,200
$178,200 without taking into consideration the structures themselves
(using .7 in the formula for city water and sewer hookups $207,900 w/out structures and a $20,790 NOI)
11.9% cap rate using the low lot rent ($165) numbers AND the .6 used in well septic calculations.
13.9% cap rate with the .7 operating cost deduction because of city water and sewer charged to tenants.
Note again that this is just for the lots…
Does this sound right or?
Ok now the value of the units… They have zero right? Because
- they are empty
- figure they need about $3000 repair average or $50,000
BUT they do have value because if they are park owned and maintained then the rents for each one can be say $400 a month for a gross yearly income of $72,000 and conservative NOI of around $43,200 or 28% cap rate and a shit load of hassle.
All numbers are very conservative as lot rent I’m quite sure could be $200
My thought is that I would get it up and running and then sell it…