Been looking for my first park.
A little history. Been a SFH and some multi & commercial investor for almost 20 years.
I have been interested in buying a park for a while, have looked and worked on buying a few. Some were low priced but disasters, and others in decent shape, but couldn’t come to terms with seller.
I have now found a park not too far from me. Some details:
- Total lots: 55
- Occupied 51
- Lot rents: $150 month
- Taxes: $7600 year
- Insurance: $800 year
- Water paid by park: $1000 a month (average for the whole park, no sub-meters)
- A smaller rural town in upper Midwest. VERY stable economy. (no growth, no loss of jobs/population) I am very familiar with the community.
- Gravel roads, city water/sewer
- Mix of older homes in fair condition, and some newer homes in a newer portion of the park.
Rents are at least $100 low (possibly $125). This is in comparison to parks in the closest town not too far away. The local rental market for new apartments is 3 bedroom: $900-$1100. Older apartments 3 bedroom: $600.
Met with sellers (Mom & Pop). Ready to retire. He said 1 MM (who doesn’t want a cool mill). I know this is way too high, but told them I would look things over, and come back to them with an educated offer to help them understand the true value of their property.
I would be borrowing equity from another property for my down, and some cash. So debt service would be 90-95% of purchase price.