Valuing a mobile home park

I’m looking at a park that is 98 lots and has 81 tenants (all tenant owned). The average lot rent is around $325 and the market is probably more like $425-$450. It was city water/sewer direct billed and is a decent looking park aesthetically and is in a good market and has a good location in that market.

How would you guys value this? The owner wants $4.5m and it feels a little high but am i crazy to be considering $4m here?

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I would need to see the entire P/L to give a solid recommendation, but 4 million for the limited description you provided sounds like an excellent deal.

Bottom line: does it cash flow after all expenses including mortgage?

If so, you have 18 lots to in fill which will increase income, as well as, increasing rents to market.

If I was aware of this deal. I would become your competition :wink:

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Thanks for the feedback. The deal I’m looking at is “something like those numbers.” TheSteve does not like a ton of competition on a deal!

Paying Units Rent Monthly Expense % Expense $$ Monthly NOI Annual NOI
81 $325.00 $26,325.00 35 $9,213.75 $17,111.25 $205,335.00
81 $325.00 $26,325.00 45 $11,846.25 $14,478.75 $173,745.00
81 $325.00 $26,325.00 55 $14,478.75 $11,846.25 $142,155.00
NOI CAP Value Value of Vacant Units
$205,335.00 6% $3,422,250.00 $180,000.00 $3,602,250.00
$205,335.00 7% $2,933,357.14 $180,000.00
$205,335.00 8% $2,566,687.50 $180,000.00
NOI CAP Value
$173,745.00 6% $2,895,750.00 $180,000.00
$173,745.00 7% $2,482,071.43 $180,000.00
$173,745.00 8% $2,171,812.50 $180,000.00
NOI CAP Value
$142,155.00 6% $2,369,250.00 $180,000.00
$142,155.00 7% $2,030,785.71 $180,000.00
$142,155.00 8% $1,776,937.50 $180,000.00 $1,956,937.50
Value Range
$1,950,000 to $3,600,000
Paying Units Rent Monthly Expense % Expense $$ Monthly NOI Annual NOI
81 $425.00 $34,425.00 35 $12,048.75 $22,376.25 $268,515.00
81 $425.00 $34,425.00 45 $15,491.25 $18,933.75 $227,205.00
81 $425.00 $34,425.00 55 $18,933.75 $15,491.25 $185,895.00
NOI CAP Value Value of Vacant Units
$268,515.00 6% $4,475,250.00 $180,000.00 $4,655,250.00
$268,515.00 7% $3,835,928.57 $180,000.00
$268,515.00 8% $3,356,437.50 $180,000.00
NOI CAP Value
$227,205.00 6% $3,786,750.00 $180,000.00
$227,205.00 7% $3,245,785.71 $180,000.00
$227,205.00 8% $2,840,062.50 $180,000.00
NOI CAP Value
$185,895.00 6% $3,098,250.00 $180,000.00
$185,895.00 7% $2,655,642.86 $180,000.00
$185,895.00 8% $2,323,687.50 $180,000.00 $2,503,687.50
Value Range
$2,503,687.50 to $4,655,250.00

If Full and Rents at $425.00

Paying Units Rent Monthly Expense % Expense $$ Monthly NOI Annual NOI
98 $425.00 $41,650.00 35 $14,577.50 $27,072.50 $324,870.00
98 $425.00 $41,650.00 45 $18,742.50 $22,907.50 $274,890.00
98 $425.00 $41,650.00 55 $22,907.50 $18,742.50 $224,910.00
NOI CAP Value Value of Vacant Units
$324,870.00 6% $5,414,500.00 $180,000.00 $5,594,500.00
$324,870.00 7% $4,641,000.00 $180,000.00
$324,870.00 8% $4,060,875.00 $180,000.00
NOI CAP Value
$274,890.00 6% $4,581,500.00 $180,000.00
$274,890.00 7% $3,927,000.00 $180,000.00
$274,890.00 8% $3,436,125.00 $180,000.00
NOI CAP Value
$224,910.00 6% $3,748,500.00 $180,000.00
$224,910.00 7% $3,213,000.00 $180,000.00
$224,910.00 8% $2,811,375.00 $180,000.00 $2,991,375.00
Value Range
$2,991,375.00 to $5,594,500.00

Thanks! It feels worthwhile with the potential value created through the upside. It’s also a market where if rates remain high with inflation, I think the market will support rent growth of at least the national inflation reading.

The recent rate environment makes pricing more tricky but I know I’d be all about this deal if rates were around 5.5-6% or under.

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Very detailed spreadsheet, how do i get a copy of one of those?

Here you go.

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Thanks for the spreadsheet. Im sure Im over thinking this, but where is the $180k value of vacant unit coming from?

“I’m looking at a park that is 98 lots and has 81 tenants (all tenant owned)”
17 Vacant pads.

The $180K came from an estimated $10k per vacant pad. It looks like I made a mistake and used 18 Vacant pads in my calculations. 18 x $10K. Oops.

You can adjust that number to suit your locale. IE Vacant Pad in CA is worth more than a Vacant Pad in Bangor ME.