Mobile Home Park Valuation?
I'm currently looking at a 7 Space mobile home park in what I would consider a less than desireable area of town. The lot size is 300' x 105' x 161' x 172' and the owner is asking $125,000.
The park owns 4 1970's 14' x 70' mobile homes rented at $400 a month and 3 spaces rented at $200 a month. Net Operating income is $21,458 per year. Gross rent multiplier is 4.09 and the vacancy rate is 5.00. (not really sure what that is telling me) There is also a Fidelity Home Warranty on the park owned mobiles.
My question to the real estate agent was how did they arrive at the asking price. What are the mobiles worth and what is the land worth. She said that for investment property the valuation was based on the income of the property.
So I guess my question to the experts is from the information I gave you does this sound like an investment worth considering? Even though it's in a lower income area of town the park is completely rented. Any opinions would be appreciated.
Vince
Vincenzo
You need to speak with Ernest Tew (I don't have the number on me) he's the master at this sort of thing. You could shoot the Loanwizard a message and I sure he'd give up the number. Knowing him he may able to answer the question.
Usually when people buy whole parks the seller carries back some financing. Is this guy willing to do that? Why is he selling in the first place?
The RE Agent says that he sold the property in 1999 for $130K and carried back the financing at that point. I guess the guy burned him, he foreclosed and now has the property back up for sale.
The realtor says that he is not willing to carry the loan again.