Louvie is on the right track when it comes to valuing the whole asset to give a price to in order to go under contract. An additional step after you go under contract is to split the value of the homes away from the real estate. What I typically do is have the seller do this for me. Our typical valuation when talking to Mom’s and Pop’s almost never involves walking them through an evaluation based on what the homes are worth vs. what the RE is worth. It just gets too confusing for most of them because they usually value the asset differently. Instead, they are usually running the asset as a whole so poorly that the NOI figure on their tax return represents a lower price than we are usually willing to pay for just the RE. So, once we agree on price and go under contract, I’ll have the seller create a list of all of the homes and value them individually with a general condition (VGood, Good, Average, Fair, Poor). I need a value to put on the bill of sale so I’ll have them come up with it themselves.
Before setting them off on this task, I stress that they need to be realistic in this evaluation based on the fact that a home in a park depreciates rapidly once it enters the park and that the customers can’t get financing or usually afford a cash purchase at a retail price. Tenants know this all too well and it’s why you’ll see someone sell their 1980’s home for $5,000 when they paid $10,000 for it 15 years ago. This is usually how I counter, “Well, I have $x in these homes.” All owners know this to be true also.
When I show up to do diligence, the seller and I will inspect each home and we’ll talk about the value/condition they assigned to the home vs. what him/her and I found in the inspection. Usually, I don’t need to beat them up on price based on these inspections (although I usually can justify it). Instead, I use this to get other things I might want such as a longer amortization on the note, a few months of deferred payments, a slightly lower interest rate, etc.
The above really didn’t answer your question, but hopefully it helps. As far as a quick value, I use a number that I feel I could sell these homes for cash for. 1970’s: $1,000-$3,500, 1980’s: $3,500-$5,000, 1990’s: $5,000-$8,000, 2000’s: $8,000-$15,000. There sometimes exist ways that 2000+ model used homes can be financed so even though I don’t like the value I usually have to give here, I am usually confident I can get a few cash sales at this price point. As an example, I spoke with an owner where a few of his tenants got FHA loans for newer single wides. How they did it is still a mystery to me.