Jim,
We spent a lot of time talking about deals like this over the week-end at the workshop and at the dealmakers forum.
Read Doug Ottersburg’s 4 part articls in the “Money Ideas” section and Ray Alcorn’s article about Due Diligence on Commercial Properties.
The MOST important thing is the numbers. Get operating expenses and income from the present owner and post it here (this will need to be verfied throughly if it looks like a doable deal…Owners lie!!). Include deferred maintenance estimates and income from rental homes (that needs to be excluded for NOI calculations as the life of a used mobile home as a rental is rather short).
You’ll also want to check the rent against the competition, some demographic info (is the area growing or dying…) Given that you can get some good opinions from the people here who know this territory.
All the best, Lyal
Going from AAA to Proball (may buy MH park) - Posted by Jim Olson
Posted by Jim Olson on February 09, 2003 at 22:31:47:
Hello All,
Thanks for taking the time to read this post… I have several rental properties and have done both fixxer uppers and flips with good sucess. Now looking at a 46 unit park with owner financing w/ 10% down (I have it). This would be a new venture for me and my partner. We have some singlewide rentals (Very good cash flow). I have a maintenance guy and a bookkeeper and I know they would be essential. The park has new road (edges used for parking and very rutty / gravel). The wells are new and the septic pipes have been replaced (was orangeberg now PVC). Park in good area but kinda ratty. Lots of 10 wide and not veryt well kept. Sorry so long but wanted to provide lots of detail for max. feedback.
The occupancy rate is high but not rediculous. Also central water and sewer will be coming down the main road in 2 or 3 years. It’s located right in the middle of lots of development. I think the park could provide cash flow w/15 yr. debt service and appreciate well with newer homes and cleaned up. Thank you for reading and any feedback. Jim