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How To Analyze A Manufactured Home Investment

Cap rate, cash-on-cash, DSCR, and payback period applied to a real manufactured-home deal.

Run every deal on total project cost, not home price. Total project cost includes land, home, site work, and carrying costs. Cap rate equals NOI divided by total project cost. Cash-on-cash equals annual pre-tax cash flow divided by cash invested. DSCR equals NOI divided by annual debt service. Many investment-property lenders may look for a DSCR around 1.25 or higher. Requirements vary by lender and loan program.