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Appraising Mobile Home Parks
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Appraising Mobile Home Parks
As a commercial appraiser I have appraised a we variety of commercial, retail, industrial, and multiple family properties. Appraising mobile home parks is …
Source: www.mobilehomeparkstore.com
Date Published: 5/23/2021
View: 9242
A COMPLETE, SUMMARY APPRAISAL
IMPROVEMENTS. The property currently consists of 25 park-owned mobile homes,. 12 mobile home sites and one site-built 3-bedroom, 1-bath.
Source: wbfinancialllc.com
Date Published: 11/24/2021
View: 7648
Mobile Home Parks | Real Estate Appraisal & Marketing …
Our commercial appraisals include the valuation of mobile home parks. This appraisal type is a function of cash flow analysis and interpretation of …
Source: appraisalandmarketing.com
Date Published: 11/22/2022
View: 4805
How to Get Your Mobile Home Park Appraisal Right Every Time
Appraisals are pretty difficult, even if you’re buying your second, third, fourth, fifth tenth 100th. We’ve got some clients that own over 100 mobile home parks …
Source: themhpbroker.com
Date Published: 6/29/2021
View: 797
Mobile Home Park Appraisal Methodology
For this discussion, I’m using “mobile” and “manufactured” interchangeably. Most mobile home parks are actually manufactured home parks, but the …
Source: appraisersforum.com
Date Published: 9/28/2021
View: 5327
Mobile Home Park Appraisal vs Industry … – BiggerPockets
The industry standard formula to evaluate a park is# of lots x caps x 12 months x expense factor x lot rent ($)I understand it is basic and …
Source: www.biggerpockets.com
Date Published: 9/2/2021
View: 4772
Mobile Home Park Appraisal
Mobile home park appraisals are proved by commercial real estate appraisers, and the best and most experienced of those will hold an MAI designation from …
Source: azappraiser.us
Date Published: 5/3/2021
View: 1637
Appraising Mobile Home Parks
Evaluation of mobile home parks press release
I’ve been appraising non-residential real estate for almost a decade. My primary geographic areas are eastern Minnesota and western Wisconsin. As a business appraiser, I have appraised a variety of commercial, retail, industrial and multi-family properties. RV park appraisal is more of a niche market among appraisers, but the process is similar to appraising many types of real estate. The valuation side of the RV park transaction is not often discussed. I have found that many involved in real estate transactions often do not fully understand the valuation process or what should be included in a proper valuation. This article focuses on the valuation approaches that should be used when valuing RV parks. Future articles will go into more detail on data collection, valuation processes and the benefit of valuation to the investor. The three traditional approaches to valuing real estate include the cost approach, the sales comparison approach, and the income approach. It’s important to understand that not all three approaches are appropriate for every property type. The cost approach is not normally used when evaluating an existing park. To my knowledge, no new parks have been built in my geographic area recently. This has to do with the economic feasibility of building a new park. Also, many municipalities would not allow new parks to be built because of preconceived notions about potential tenants or homeowners. In some cases, such as a planned expansion of an existing park, a cost analysis is appropriate to determine the feasibility of new sites. The income approach to valuation is the primary method of valuing a mobile home park. The income approach analyzes the subject’s historical and future rental income potential from property rents and other sources, rental losses due to vacancy and non-payment, and finally relevant operating costs. The remaining income or net income is then capitalized at a value when the park and its income streams are stabilized. If income or expenses are expected to change significantly over the investment period, a discounted cash flow analysis should be used. The sales comparison approach is also valuable when evaluating RV parks. The appraiser finds and very information about the sale of similar parks. Information collected includes expense ratios, effective gross income multipliers (EGIM), and capitalization rates. It is not enough to just use a “per page” value derived from sales. A value per location is a term that is often talked about, but investors don’t typically buy parks based on this method. This is a brief summary of the valuation approaches used when evaluating RV sites. More details and insights into these and other topics will be presented in the future. Erik J. Hanson 7 Rivers Appraisal La Crosse, Wisconsin Phone: 608-519-3341
Mobile Home Parks | Real Estate Appraisal & Marketing Associates
RV site valuation is a function of both cash flow analysis and the interpretation of comparable sales data. We pay special attention to the land rental market and the amount of expenses incurred to generate income. The occupancy of competing parks as well as the historical occupancy of the theme are crucial to the financial success of the facility.
We consider historical and projected revenue, actual pads improved, as well as the capacity of the site to be further developed in our analysis. We have prepared valuation reports for dozens of RV parks and are happy to provide opinions on the market value of this type of property. Central Pennsylvania has multiple tiers of mobile home parks, ranging from older, dated, run-down facilities with upside potential to newer, modern parks with state-of-the-art amenities. Our experience with this type of property is extensive and our work is both thorough and accurate.
» How to Get Your Mobile Home Park Appraisal Right Every Time
Here are the show highlights:
Valuations are difficult even if you are buying your second, third, fourth, fifth or tenth condominium. The MHP brokers have worked with clients who own more than 100 RV parks or RV communities and even they struggle with reviews. (1:08)
There are three common valuation obstacles or challenges that can screw up a deal, even for an experienced buyer. (1:08)
The first of these is to strike a deal with artificially high, inflated property rents that can make a community appear more valuable than it could be. (1:45)
The second potential obstacle is receiving an offer asking you to pay what may be the highest price per pad in the state, when our sales data may have produced a more realistic figure based on our constantly updated market analysis. (2:06)
The third mistake is when your lender receives quotes and chooses an appraiser with little or no experience with RV or RV sites. That’s why it’s so important to let us work with you. We work with reviewers on an ongoing basis and can recommend reviewers with experience in this narrow field. The lender does not have to accept our recommendations, but often adds at least one of our contacts to the list of three from which to choose. (2:28)
The MHP Broker Review in a Box is our systematic and organized marketing package of rental price comparisons and other marketing information that can make the review easier and more accurate. (3:58)
Hello and welcome to the tips and tricks of the mobile home parking space broker. This is the podcast where we talk about RV park investing because that’s what we’ve been involved with for the last ten years. Let’s dive into today’s episode. This is your host, Maxwell Baker.
00:20 Maxwell Baker
Welcome to The Mobile Home Park Brokers Podcast. I’m happy to say that we’re going through something we’ve learned the hard way. That way, every time you get a loan for your park, you get the right rating for your caravan and motorhome community. I’m happy to say that a lot of this has to involve trial and error as we fail multiple times. That’s basically how life works. You gotta fail forward, right? Often fail, fail quickly, fail forward. As always, this episode is brought to you by the Community Price Maximizer. This is a proprietary system that guarantees you a higher price when you sell your RV or RV pool with the RV Site Broker. So let’s jump right in.
01:08 Maxwell Baker
How do you get your RV site rating right every time? When you apply for a loan, finding a lender can be difficult at first. But the other major hurdle is really trying to do your assessment correctly. Ratings are pretty difficult even if you buy your second, third, fourth, fifth tenth 100. We have some clients who actually own 100+ RV parks and they even struggle with these RV park or RV ratings. There are a number of things that can go wrong with your assessment.
01:45 Maxwell Baker
You can get into a grossly inflated property rent business, which is pretty normal. A lot of these buyers out there or operators are buying a business, raising rents above what the market is and trying to sell it on. When they get the rating they move the needle back and say look you’re $100 above the market, that’s pretty unreasonable, you’re not a differentiator of anything in the market.
02:06 Maxwell Baker
Second, you’re paying possibly the highest price per pad the state has ever seen. We’ve run many benchmarks across multiple states where we’ve sold the highest price per pad in each state, and it all depends on the data.
02:28 Maxwell Baker
Third, you could simply bring in an appraiser who hasn’t known or actually done many caravan or RV communities in their career. This is probably the hardest thing to get around. But there are some ways to mitigate it. Broker Price Opinion in a Box or Valuation in a Box is what we call it, which we’ll get to in a moment. With that in mind, let’s dive into how we, as your broker, can help you get the review right every time you work with us. That’s why a lot of people hire us because we’re good at making sure things don’t get traded again.
02:58 Maxwell Baker
When you sign your deal and finish your merry dance like everyone does after signing their park. It’s time to get a deal. When you contact your lender or lenders, you need to find out how their rating is done.
03:15 Maxwell Baker
Since 2010, municipal lenders have had to find at least three appraisers and then go through a blind bid process to get the job. The days are so long that lenders pick Johnny on the spot, just down the road from where they live, to do the appraisal. That just doesn’t happen anymore. They have to source it, I think it’s a federal mandate that they have to source three different lenders out there. As your agent, it is extremely important that during this time that you are speaking to the lender, we go with the shotgun and they begin to interview and see the quotes from each appraiser to ensure you are getting the right one if you choose.
03:58 Maxwell Baker
What we are trying to do, as I said, is called an “evaluation in a box”. That’s essentially a marketing package we have, but we’re adding a bit more data-oriented elements. We pull new rental comps, we pull fresh sell comps and we make sure everything is in there to show them where the market is.
04:18 Maxwell Baker
Be very aware that some of our competitors, I won’t name their names of course, do include rent compensation in their marketing packages and they are dead wrong. Never check, even with us, never what the real rental prices are. We’re very strict with our research team in India when it comes to getting rent offsets, so we’re very specific, but a lot of these big names will just fart up a number and just throw it in there. Be careful with this and make sure you create your own rent offsets.
04:53 Maxwell Baker
Second, the selling prices. Selling prices are another variable to check. We had a store that we personally sold at and we saw that a competitor had a listing in the state that we are in, right here in Georgia. They used a retail comp that we were selling but it was like nothing in it was accurate. It was just a complete lie. In fact, if you call them and say, “Hey, how did you get this data?” they’ll tell you we made it up. I mean they won’t lie to you on the phone. I commend her for that. But in my opinion, including fake data in your marketing package is pretty slimy.
05:28 Maxwell Baker
But like I said, be sure to check how big the park was, what it was sold for, make sure it’s fresh. Here at The MHP Broker we verify all sales accounts, rental contracts and the workings of the local community. It’s all gone into a nice little pot that we create to give you very good value for your camper place. It’s all about risk, right?
05:48 Maxwell Baker
Second, let’s talk a little more about the Sales tab. Our research team spends a total of 315 hours per week collecting data and finding real sales data for 15 different states in which we operate. We always have the most up-to-date sales data and trends for your local community. In addition, we also have the most active buyer list because we clean the entire database every six months to ensure you have the correct data and the most likely buyer when you market your park with us. Just be careful, don’t let those fast talking brokers out there tell you that they can buy all the data, it’s false, they just aren’t willing to invest to help you get the highest possible price. Often it just shoots from the hip and makes up numbers, as we mentioned earlier.
06:35 Maxwell Baker
So last time we tried to step out when we found the appraisals were coming in or the lenders ordered the appraisal. We try to give you three different appraisers that we actually have, the MHP broker has personally used to rate RV communities and RV communities. The lender probably won’t pick all three, but the odds of getting one are pretty good. So having one in the mix to apply for the job is better than a local person or someone who did the self storage for them two months ago. You just have to be very careful or very proactive to make sure you give them the reviewer who really knows what they are doing. That’s the biggest variable there.
07:19 Maxwell Baker
We are really good at finding this network of reviewers for you. People hire us because our win rate is over 80%. We finalize our contract and make sure it is finalized because we have all the right data. We’ve done all the due diligence up front and make sure everything we give you are really real numbers, not some fake thing they put in there just to make it look good.
07:45 Maxwell Baker
That pretty much concludes this week’s episode. I’m going to revisit those three things we just discussed.
07:56 Maxwell Baker
This ensures that you have up-to-date data and that the sales and rental conditions are correct.
08:00 Maxwell Baker
Make sure you double check the data that other brokers out there include in their marketing packs because don’t rely on having to look it up yourself. Or as always, you can hire us and we will help you with that.
08:13 Maxwell Baker
And third, you always want to try to see if you can hire another assessor to help you do that assessment correctly.
08:23 Maxwell Baker
As I said, since 2010 the rules have changed. Not very many people out there, no lender really, should do this, but they source three different lenders, they bid and then they can choose which one they want to use. Sometimes it’s the cheapest, maybe not, but as I said, when you hire us we give you our top three reviewers who we know do a lot of business in the industry and hopefully you pick one of them.
08:48 Maxwell Baker
Those are the top three things I wanted to go through to get your review right every time. This Episode is brought to you forever and ever by the Community Price Maximizer – this proprietary system that guarantees you a higher price when you sell your RV Park or RV Park with us in a four step process. Give us a jingle 6789320200. On next month’s episode we’re doing one a month up here – we’re going to go over lot rent versus park home rent. They are not the same. All incomes are not created equal no matter what people tell you. But I’ll leave it with the three main things that we’ll go over next time. As always, we appreciate you listening and appreciating your time. Have a great day.
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