Deal?
Found a 6 unit MH property that is listed at $130,000 with rental income of $2100/mo. Units are trashed early 70's. Questions for MH experts out there.
1. Zoned for multi unit, so I could dispose of MH, and put duplex or triplex on it. What is estimate for disposing of a MH.
2. If I kept property as is, what are key ingredients to make sure cash flow is really there.
You need to check the zoning with the local planning folks.
If you were to build will the numbers stack up.
If you go with keeping the place a MH park you could look at upgrading the units. I am assuming they are owned by the park and rented. The repo market is really low so you can get good units for very little.
Not sure if the spaces are wide enough for double wides, etc.
Make sure the systems work.
As to the financials you should request the records. Schedule E from the owners tax returns should show what the owner is declaring so potentially the facts or maybe a more positive version if you are buying (income would not be overstated and the expenses would not be under reported).
BTW - Check to see if you can raise finance. The units might be too old for some lenders so the seller might need to offer terms or take a low price.
John
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thanks John, one of the issues the selling agent mentioned was that due to the age of the units, most banks would be wanting 30-40% down, which is a lot of cash to tie up for that amount of cash flow. Seller will not help with financing.
Maybe this is NOT a deal?
Prove to the seller that you are serious. Then present to the seller what you want (as terms combined with price) and then wait for a response!
If rejected, check back once a quarter with a revised offer. The longer the seller waits for an approved buyer our serious offers get weaker.
Eric & Rosa
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