Posted by John_OK on March 22, 1999 at 23:02:18:
They’re asking 695K…didn’t get the expenses…just gestimate…anything else?
thanks for the help
MH HELP REQUIRED - Posted by John_OK
Posted by John_OK on March 22, 1999 at 20:26:00:
I was offered a MH park today with a 6/6/3 house on it. It sits on 17.3 acres and has 49 spaces with 2 vacant. They also own 8 MH’s in the park and rent them for 325-375. The lot rent is $135/lot. Said income was $7500/mnth. They don’t want to carry the loan. Owner 69 and retiring. It’s located off of a main highway and can use the home for a bed ‘N’ breakfast.
- What numbers am I missing?
- What type of offer should I make?
- What should I look for when I inspect the property?
- What is man’s purpose in life?
Please help…
John Investor
Re: MH HELP REQUIRED - Posted by phil fernandez
Posted by phil fernandez on March 23, 1999 at 05:59:43:
John,
The guys you want to talk to are Ernest Tew, Lonnie Scruggs, David Segars and Dan Fink. They all own parks and are experienced in the business.
Just a couple of observations. The sellers asking price of $695,000 based on the income stream is way out of whack. When you are calculating the expenses don’t forget to establish a reserve for replacement. This money would have to come out of the cashflow to service eventual repairs and possible replacement of the water, sewer systems and roadways in the park.
Are you on city water/sewer ?
Also you state that the sellers don’t want to hold paper. It is not easy to get a bank to finance mobile home parks. As Doug said, the sellers will probably have no choice but to participate in the financing of the park. The sellers already are used to getting an income stream from the rents, why wouldn’t they not like to continue to get that income stream from a mortgage that they would hold on their park.
The most important thing for you to do is spend some time and sit down with the sellers. Find out exactly what they want to accomplish here. And verify verify verify. Don’t take the sellers word for any of the numbers.
Re: MH HELP REQUIRED - Posted by DougO(NM)
Posted by DougO(NM) on March 23, 1999 at 24:04:56:
The income from the 47 paying spaces is $135 * 47 = $6,345 per month or *12=$76,140 per year. Guessing on expenses, I’ll say 35% of income or $26,649 Subtract expenses from the gross income and you get an NOI of $49,491 (You must use actual expenses) Not knowing the age,condition, size of homesites and particulars of the construction of the property, and the local market conditions, I’ll be conservative here and use a cap rate of 12%. This would indicate a value of $412,425 for the income stream produced by the MH lots. (NOI/CAP RATE) You then need to look at each of the MH’s and see what you think they are worth, and add it to the value for the MH income stream. Last but not least need to determine if you are willing to pay extra for the big house and the land. Does the house, land & mh’s equal the difference between whatever you figure the park to be worth and what they are asking ? Whatever you come up with, the selelr may not have too much choice as to whether he carry’s paper or not - not alot of financing for these type properties, unless the buyer has an excelelnt relationship with a local lender. (and alot of his own $ in the deal)
Good Luck.let me know if you need anything else.
Doug
PS NOSPAM in email address remove if need to send email
Re: MH HELP REQUIRED - Posted by David Alexander
Posted by David Alexander on March 22, 1999 at 22:25:41:
How bout’ the asking price, expenses, etc.
Their are plenty of people on this board that could help, but, you need to supply more info,
David Alexander
Re: MH HELP REQUIRED - Posted by john b wright
Posted by john b wright on March 22, 1999 at 20:42:08:
need to call a man by the name of:
Earnest Tew in Florida
He buys and reconditions MH Parks and can tell you
everything you needed to look for-will e-mail you
his info tomorrow
Re: MH HELP REQUIRED - Posted by Paul(ok)
Posted by Paul(ok) on March 23, 1999 at 07:31:44:
thanks Doug it is always nice to see numbers. I like to figure the numbers then look at the answers to see if im close.