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A real AssetForge Full Underwriting report — institutional-grade analysis on a 58-unit Mobile Home Park in Alabama. Every section a lender, LP, or acquisition team needs to make a capital decision.
Mobile Home Park · 58 lots · Greensboro, AL · $2,400,000
AssetForge Underwriting Report
Pecan Hill Mobile Home Community — Greensboro, AL
⚠️ DISCLAIMER: This is an AI-generated informational analysis for demonstration purposes only. It is not financial, legal, lending, or appraisal advice. All figures are illustrative.
1. Executive Summary
VERDICT: CONDITIONAL — Proceed with Caution
Confidence Level: 72%
Pecan Hill Mobile Home Community is a 58-lot manufactured housing community located in rural Greensboro, Alabama (Hale County). At the asking price of $2,400,000, the deal presents a 7.1% going-in cap rate and a 1.18x DSCR — below the preferred 1.25x threshold for most agency and SBA lenders. The community shows above-average park-owned homes (POH) concentration at approximately 40%, which exceeds the 25% cap for standard Fannie Mae financing and will require a seasoned lender comfortable with MHP-specific underwriting.
Key Positives:
- Stable occupancy (83%) with long-term tenants averaging 7+ years
- City water connection reduces operational complexity
- Below-market lot rents creating a value-add upside story
- Rural market with limited competing supply
Key Concerns:
- Private septic system (significant capital risk and regulatory exposure)
- 40% POH ratio disqualifies standard Fannie Mae MH financing
- DSCR of 1.18x fails SBA 7(a) preferred threshold (1.25x minimum)
- Hale County median household income ~$32K (high tenant income risk)
- No professional management in place — all seller-operated
2. Asset Overview
| Field | Detail |
|---|---|
| Property Name | Pecan Hill Mobile Home Community |
| Address | Greensboro, AL 36744 (Hale County) |
| Asset Type | Manufactured Housing Community (MHC) |
| Total Lots | 58 lots |
| Occupied Lots | 48 lots (83% occupancy) |
| POH Count | ~23 homes (40% POH) |
| Tenant-Owned Homes | ~35 homes (60%) |
| Water | City water (positive) |
| Sewer | Private septic (🚩 red flag) |
| Year Established | Est. 1978 |
| Management | Owner-operated, no 3rd party |
Market Context: Greensboro is the county seat of Hale County, a rural Alabama county with a population of approximately 14,000. The area has experienced population decline over the past decade. Limited employment base outside of agriculture and light manufacturing. The market is characterized by low competing MHP inventory, which supports occupancy but limits rent growth potential.
3. Income Analysis
Current Income (Trailing 12 Months — Seller-Provided)
| Income Line | Monthly | Annual |
|---|---|---|
| Lot Rent (48 occupied × $285/mo) | $13,680 | $164,160 |
| POH Rent Collected (est.) | $4,800 | $57,600 |
| Late Fees / Misc | $320 | $3,840 |
| Gross Potential Income | $18,800 | $225,600 |
| Vacancy Allowance (17%) | ($3,196) | ($38,352) |
| Effective Gross Income (EGI) | $15,604 | $187,248 |
Underwriter Notes:
- Lot rents at $285/mo are 10–15% below the market range of $310–$340/mo for comparable AL rural MHPs. Upside exists but is limited by tenant income constraints.
- POH income is not sustainable income for lender purposes. Most lenders haircut POH revenue by 25–40% due to maintenance exposure, vacancy, and management overhead.
- Seller's T12 shows minimal vacancy. Underwriter applied a normalized 17% vacancy rate consistent with rural MHP benchmarks.
4. Expense Analysis
Normalized Operating Expenses
| Expense Category | Monthly | Annual | % of EGI |
|---|---|---|---|
| Property Taxes | $850 | $10,200 | 5.4% |
| Insurance | $1,100 | $13,200 | 7.0% |
| Water / Utility (city) | $1,200 | $14,400 | 7.7% |
| Septic Maintenance & Pumping | $800 | $9,600 | 5.1% |
| Management (8% EGI) | $1,248 | $14,980 | 8.0% |
| Maintenance & Repairs | $1,500 | $18,000 | 9.6% |
| POH Maintenance (est.) | $1,800 | $21,600 | 11.5% |
| Admin / Professional | $400 | $4,800 | 2.6% |
| CapEx Reserve ($75/lot) | $363 | $4,350 | 2.3% |
| Total Expenses | $9,261 | $111,130 | 59.4% |
🚩 RED FLAG — Expense Ratio: At 59.4% of EGI, this is elevated vs. the 45–55% benchmark for well-run rural MHPs. The delta is largely attributable to POH maintenance burden and septic costs. Lenders will normalize expenses upward from seller-provided figures.
Net Operating Income (NOI): $187,248 − $111,130 = $76,118 / year
5. Valuation Analysis
Income Approach (Primary)
| Cap Rate | Implied Value |
|---|---|
| 6.0% | $1,268,633 |
| 6.5% | $1,171,046 |
| 7.0% | $1,087,400 |
| 7.1% (Going-In) | $1,072,000 |
| 8.0% | $951,475 |
| 9.0% | $845,756 |
At the $2,400,000 asking price, the implied cap rate is approximately 3.2% — not 7.1%. This discrepancy suggests the seller is either using gross income (not NOI) to set price, or is pricing in significant upside that has not yet materialized.
Underwriter's Opinion of Value: $1,050,000 – $1,250,000
This range reflects normalized NOI at market cap rates (7.5–9.0%) appropriate for a rural Alabama MHP with above-average POH, private septic, and sub-institutional management.
🚩 RED FLAG — Asking Price Gap: The asking price of $2,400,000 represents a 92–128% premium over the underwriter's assessed value range. The seller appears to be pricing on gross revenue multiples or replacement cost, neither of which reflects lender-supportable value.
6. DSCR Analysis
Loan Scenarios (30-Year Amortization, 7.5% Rate)
| Loan Amount | Monthly P&I | Annual DS | DSCR | Status |
|---|---|---|---|---|
| $750,000 | $5,241 | $62,894 | 1.21x | ⚠ Marginal |
| $850,000 | $5,940 | $71,278 | 1.07x | ✗ FAIL |
| $1,000,000 | $6,988 | $83,856 | 0.91x | ✗ FAIL |
| $650,000 | $4,542 | $54,510 | 1.40x | ✓ PASS |
| $600,000 | $4,192 | $50,318 | 1.51x | ✓ PASS |
Maximum Supportable Debt (DSCR ≥ 1.25x): ~$700,000
At $700K loan, assuming 25% down on a lender-supported value of $1,100,000, the required equity position is $400,000. This means the deal requires significant capital beyond the asking price discount.
7. Stress Test (2026 Standards)
| Scenario | NOI | DSCR @ $700K | Pass/Fail |
|---|---|---|---|
| Base Case | $76,118 | 1.40x | ✓ PASS |
| +20% Vacancy | $68,506 | 1.26x | ✓ Marginal |
| +15% Expenses | $64,700 | 1.19x | ✗ FAIL |
| +200bps Rate Shock | $76,118 | 1.18x | ✗ FAIL |
| Combined Stress | $54,200 | 0.99x | ✗ FAIL |
The deal is not stress-test resilient at any loan amount that produces a lender-reasonable equity position. Only the most conservative loan amount ($600–$700K) passes base case and light stress scenarios.
8. SBA / Agency Eligibility
| Program | Eligible? | Notes |
|---|---|---|
| SBA 7(a) | ⚠ Conditional | DSCR < 1.25x preferred; would require strong borrower PG + reserves |
| SBA 504 | ✗ No | Not applicable for investment property without significant owner-occupied component |
| Fannie Mae MH | ✗ No | POH > 25% (40% actual) disqualifies standard DUS execution |
| Freddie Mac | ✗ No | Similar POH concentration limits apply |
| USDA B&I | ⚠ Possible | Rural designation qualifies; lender appetite and deal size may be limiting factors |
| Conventional Bridge | ✓ Yes | Asset-based lenders, private capital — expect 9–12% rate |
Best Financing Path: USDA Business & Industry (B&I) loan or private/hard money bridge with a 3–5 year business plan to reduce POH ratio to <25% before refinancing into agency execution.
9. 5-Year Pro Forma
| Year | EGI | NOI | Cap Value (8%) | Cash-on-Cash |
|---|---|---|---|---|
| Y1 | $187,248 | $76,118 | $951,475 | 4.2% |
| Y2 | $193,866 | $82,400 | $1,030,000 | 5.1% (rents +3%) |
| Y3 | $200,751 | $89,200 | $1,115,000 | 6.2% (POH reduction) |
| Y4 | $210,789 | $98,400 | $1,230,000 | 7.8% |
| Y5 | $221,328 | $108,900 | $1,361,250 | 9.4% |
Assumes: 3% annual rent increases, gradual POH conversion (2 homes/yr), stable occupancy
5-Year Value-Add Upside: $1,361,250 exit at Year 5 vs. $1,100,000 entry = $261,250 appreciation + cumulative cash flow.
10. Risk Matrix
| Risk | Severity | Probability | Mitigation |
|---|---|---|---|
| Septic system failure | Critical | High | Immediate inspection, budget $50–$150K for repair/replacement |
| POH vacancy cascade | High | Medium | Begin conversion plan; acquire tenant-owned or remove problem homes |
| Lender rejection | High | High | Price renegotiation to $1.1M–$1.3M range; pursue USDA B&I |
| Asking price > value | Critical | Confirmed | Non-starter at $2.4M; max offer $1.2M |
| Tenant income risk | Medium | High | Hale County income levels limit rent increases to 3–4%/yr max |
11. Due Diligence Checklist
- Phase I Environmental — septic system age, location, condition report
- Septic Inspection — pumping records, tank size, drain field condition
- Title Search — lot boundaries, easements, encroachments
- Rent Roll Verification — cross-check with bank statements (12 months)
- Lease Review — all lot leases, POH leases, month-to-month vs. term
- Utility Bills — city water billing history
- Property Tax Records — current assessment, payment history
- Zoning Confirmation — MHC-zoned, any nonconforming issues
- POH Titles — confirm seller owns all park-owned homes free and clear
- Survey — lot count verification, acreage confirmation
- Insurance Claims History — prior 5 years
- Tenant Interviews — spot-check 3–5 tenants on length of tenure, satisfaction
12. Walk-Away Triggers
🚩 Walk away if any of the following are confirmed during due diligence:
- Septic system requires replacement >$100K within 24 months
- More than 3 POH lots vacant/abandoned beyond what is disclosed
- Any title defects or unpermitted structures
- City water agreement is informal or month-to-month (not recorded easement)
- Seller refuses to provide 12 months of bank statements to verify income
- Asking price cannot be negotiated below $1,300,000
13. Deal Analysis Memo
Prepared by: AssetForge Underwriter (AI-Assisted Analysis) Date: April 22, 2026 Report Type: Full Underwriting — Illustrative Demo
Summary Recommendation: At the asking price of $2,400,000, this deal does not pencil. The AI underwriter assigns a CONDITIONAL verdict contingent on significant price renegotiation. At a purchase price of $1,050,000–$1,250,000 (reflecting a normalized 7.5–8.5% cap rate on $76,118 NOI), the deal becomes executable with the right financing structure (USDA B&I or private bridge) and a clear value-add business plan to reduce POH concentration and improve DSCR over 24–36 months.
This analysis is AI-generated for informational purposes only. It is not a substitute for a licensed MAI-certified appraisal, environmental assessment, or legal due diligence. All figures and projections must be independently verified by qualified professionals before any capital commitment.
Generated by AssetForge Underwriter — AI-powered institutional real estate underwriting.