Mountain View Mobile Home Park

Abstract

This reality case pertains to one of the largest mobile home parks in the Carolinas. In 2003, the owner of the Mountain View & Vista Mountain Mobile Home Park passed away. The estate executrix hired an appraisal company to value the property. The body of the case presents three standard methods for valuing the property based on the actual appraisal report: the Cost Approach, the Income Approach, and the Sales Comparison Approach. The case then introduces the Investment Analysis Approach, which models future after-tax cash flows, considers the method of financing, and allows for year to year changes in revenues and expenses. This fourth technique complements the valuation provided by the formal appraisal. One suggested teaching strategy is to split the class into sets of matched buyers and sellers to extract data from the case and perform their independent Investment Analysis. The groups can then take opposite sides as buyers and sellers and try to negotiate a mutually agreeable price for the property.