You need to determine what the homes are worth, and pay that value (don’t ever ‘cap’ the income from the homes). ‘Worth’ is what they can be sold for on notes in your community. If the face value of the notes is an accurate representation of what the homes are worth (e.g. a 1995 medium-quality home with central A/C and all kitchen appliances has been sold for $10k at 14.5% interest) then that note may indeed be worth full face value. The interest rate is your return.
But if the seller wrote the note differently on that house - say he structured it as $20k, at 0% interest - then you need to discount that note by 50% to $10k - what the home is actually worth, sold in-place, on a note with reasonable interest to give you a good return (mid-teens or higher).
So you’ll need to do your homework, comb through each note, and determine if it’s face value is ‘fair’ or a trumped-up face value at 0% interest. I’d also pay careful attention to the down payment. Someone who put down $4k on that $10k house at 14.5% makes me think that the remaining $6k of value on the note is likely to be paid, so I’ll cash-out the note seller at $6k (of course, the large down payment reduces the home’s value from $10k to $6k).
If that same home had a note written differently - say, showing the $20k value at 0% interest, and the person who signed the note put just $500 down, then that note is definitely not worth $20k. It would be worth $10k (unless the person has been paying for years like clockwork and only has another $3k to pay on the home - then the note is worth $3k or a bit less).
So the moving parts you’ll need to evaluate are:
FMV for each house sold on a note with reasonable interest rate (reasonable for high-risk MHP residents - 15% or so)
How much down was actually taken on each note, and how long ago each note was signed (e.g. you’ll need to estimate the default rate)
Whether the notes have a good interest rate built-in (e.g. lower face value) or are 0% notes (e.g. inflated face value)
Rule of Thumb: Pay the lesser of FMV or the principal amount left on the note (assuming there is already good interest built-in for your return).