Looking at an off market park in the midwest w/ the following details:
- Town has population of 6k, 20 miles to a city just under 90k
- Median home price in zip code is $160K, in metro is $140K
- Metro vacancy is 10%, town vacancy is 6%
- Metro unemployment at 4%, town also at 4%
- Avg. 2br rent in town is ~$700K; avg 3br ~$1k
- Called a few parks closer to the primary metro. Lowest lot rent I could find is $285, and that park is expanding.
- Metro population up 8% since 2010, town’s population up 10% since 2010,
- No Walmart in the town itself - nearest Walmart is 20 miles away in the center of the metro
- Mom and pop park, they’ve owned it for 25 years, no website
- 17 total lots, 13 TOHs, lots rented at $240/month
- All TOHs, no POHs
- Public utilities
- Tenants billed directly for water
- Park generally well kept, skirted homes, no junking lying around
- Park is right next to a train - not sure how often train passes by. On google maps there’s another park in town also next to a train, and it looks to be around 80% occupied
- Access to the park is on land that is owned by railroad. Owner can’t get an easement, but is organizing a 30 year lease from the railroad, cost TBD
- Not yet under contract, haven’t done test ads
- Seller asking for $309K, but we all know 13 x 240 x 12 x 0.6 x 10 = $225K. Some room to raise rents.
- First park, and I’d need to manage this park from out of state, probably with a friend who lives in state. Seller only open to financing up to 40% w/ 5 year amortization, not sure of interest rate.
- Seller doesn’t have tax returns from 2018 (generally disorganized and in poor health). He does have returns from 2017.
Thoughts or advice? Not trying to hit a home run here. Goal is to just get moving on my first park and get some momentum.