My husband and I have been looking for a MHP for sale with the right elements and think we may have found one. We have yet to complete a full checklist of due diligence, but thought I would throw the numbers and info I do have out for consideration and feedback from the forum.
First of all, the park meets all of our ‘location’ requirements. Right outside a large MSA, population count of MSA, commuting access to several cities, correct financial demographic of the population, rentals in demand, on a bus line, w/in walking distance of Walmart, ect.
-50 total units, 6 of which are SFR or duplex so 44 actual mobiles. Only 4 mobiles are owned by the tenant, rest are park owned
-SGI is 29K/mo
-Expenses of well, septic, electric garbage total 12K annually
-Taxes and insurance 22K annually
-They manage and do most maintenance themselves, pay some part time help onsite, exact costs unknown yet.
-Practically 0% vacancies
So: 348,000 SGI-5% Vacancy 17,4000= 330,600 AGI
330,600- operating expenses 34,000 = 296,600 NOI
Asking price is 2,000,000 with 560,000 assumable @ 3.48 w/ 1% assumption - their current payment is $4500/mo
Seller is willing to carryback, (knowing they must because banks won’t loan on the park owned home income) the exact amount unknown and not negotiated yet.
Proposed financing option: Seller finance 1,440,000 @ 6% over 30 yrs= 8,633/mo + existing loan of 4500= 13,133 monthly debt service
296,600 NOI - 157,596 DS = 139,004 CFBT
296,600/2,000,000= 15 cap rate
Contingent upon a full and detailed due diligence, based on the info I provided, are there any specific items or concerns I should make sure to consider?
Rents have not been raised in the last 18 months, and I would likely charge back a blanket amount utility charge to cover the park out of pocket expenses to further increase income. Will also work to sell park owned homes on contracts to the tenants, reducing park maintenance costs, which were not included in the above figures.