Arrowhead MHC is a mostly stable community with achievable upside in occupancy and rent, located 40 minutes from downtown Roanoke Rapids, NC.
Arrowhead MHC consists of 50 MH lots with 14 tenant owned homes (TOH), 29 rented park owned homes (POH), 5 vacant park owned homes, and 2 vacant lots. The average lot rent in the park is $208 and the average home rent is $191 above lot rent. The park owned homes are an average vintage of 1986, with some in average condition and some that need work. The park is NOT in an opportunity zone or flood zone.
Arrowhead MHC is serviced by public water that is billed directly to tenants, a 1:1 septic system, and electricity that is public and billed directly to tenants. Trash is serviced by a dumpster and included in rent. The roads are gravel and in good shape.
The pricing represents a 7.66% CAP using all income except POH revenue, at a 49.9% expense ratio. The gross CAP rate is 9.99%. We are asking investors to submit offers at or above $860,000. We have indications that this park qualifies for recourse community bank debt and are estimating terms of a 65% LTV, 5% interest rate, and 25 year amortization, which provide investors with day 1 cash on cash returns of 13.21%. Once the park is fully stabilized, the proforma value is $1,269,000 at a 7.50% CAP rate and provides a 21.82% cash on cash return.
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