The community has 38 mobile home lots, 13 are on a rent to own contract (RTO) with a $350 lot rent and an average $191 RTO payment. All RTO’s mature by April 2021. There are 6 rented park owned homes (POH) with an average rent of $120 above the lot rent. Current occupancy is 100%.
Oak Harbor uses public water and is on a 1:1 septic system. Water, sewer and trash are included in the rent, while the tenant’s electric is billed directly.
The park is priced at $1,400,000. The pricing represents a cap rate of 7.19% using lot rent income excluding home rent income) on normalized actuals representing a 41.9% expense ratio. We are asking that investors submit offers at or above $1,400,000. This community should qualify for conventional recourse bank financing from a local bank using about a 70% LTV, 5% interest and a 25 year amortization providing investors with a 9.63% cash on cash return and a 14.4% total return in the first year of ownership.