Lets take a closer look at each line of this formula. This is the part that can get tricky when valuing smaller communities. Many times the owner will have added additional revenue sources over the years such as rental mobile homes, mini-storage, laundry, etc. If you must also purchase the other assets, value them separately and add them to the value of the community itself. Many owners and RE Agents use all income sources when figuring the Gross, which can severely distort the value of the property.
Lets look at a rental mobile home for example.
Another area to look out for is such items as late fees, etc. Do not include these in your calculations, those are not constant. You are buying the community for the revenue produced by the sites, so use that income only as your starting point and add in any thing else you may have to purchase such as homes, etc. on a case by case basis. This will lower the NOI to give you an accurate picture of what's happening today, and since we are paying for income, if a space is vacant, we aren't interested in paying too much for it. This comes into play later as we formulate our offer.