Its me, Its me - Posted by Ryan_MO
Posted by Ryan_MO on July 17, 2003 at 11:34:24:
Hey guys, I know and understand your reasoning for scoffing at my recent story. In short, here are the details of the one that went down, and i have rent rolls and everything to prove the numbers.
7 mobiles
units 1,2,4,6 are 3 bedrooms - rent $350
units 3,5,7 are 2 bedrooms - rent $250
There is a 3 bedroom and 2 bedroom vacant. current revenue is $1550/mo. We have those 2 vacancies about to be filled with several candidates we are reviewing.
When both are filled in the next few weeks, they will be bringing in $400 and $450 because they will be section 8. So at that time, revenue will be $2400/month.
Now expenses are minimal. Tenants pay all their own expenses, and cut their own yards. The only expenses i have are insurance, taxes, trash pickup, and actual home maintenance. My new insurance policy is roughly, i havent received the first statement yet, $600 for the year including trailer insurance and property liability. Last years expenses totaled $2,476.52 with a annual revenue of $25,800. The old owner had it full last year and recently became ill. So you see, last years NOI was $23,323.52. That comes out to a value of about $230,000. With our raised rents and filled vacancies, it WILL be higher.
Now I know many people say not to value a park including rental income and base it on the lot rent. What if the property is in a predominantly rental area for this type of housing. It is in a small town, white picket fences bla diddy da. Many people own their stick builts but for the most part, the trailers in town are rentals and pretty much filled. But as far as valuations of a small park, mst if not all of the parks I have ever looked at under 15 units are predominantly rentals with park owned units, and are valued as such based on the rental of the unit not what the lot rent WOULD be. And these are properties form all over the country.
As far as the other 10 unit park which i am about to close on, I have all the numbers to prove its worth, again it is a rental park but it is ALL section 8. My rent comes guarenteed from the gov’t every month. But all i will say about that one now since it isnt closed yet, is that even if I can’t sell it in 2 years to someone will value it based on its INCOME and not what lot rent WOULD BE, Ill gladly sit back and receive my half of after debt service income of $59,352.66. Oh yeah, and Uncle Sam is paying me that. So even if I can’t sell out in 2 years and cash in on a 1/2 mil in cash form the park like i said in my success story, I will gladly make the same sitting on my sofa paying a few bills as my collegues just graduating will be making in their new $35000/year marketing JOB.
I apologize if I just ranted a bit, I just wanted to get out details and answer as many questions/comments ahead of time, cus I can see them coming. If you have any questions about my recent aquisition, then please dont hesitate to ask me.
Ryan