I'm looking at a park with 42 sites: 39 POH (5 of which are vacant and, supposedly, habitable) + 3 vacant lots.
Lot rent is $160 / month with water, sewer, and electric direct-billed to tenants.
The seller is asking $1,175,000 because they are, of course, including the home rent ($412 including lot rent) in the NOI and then selling that at a 9-cap.
My valuation is:
39 lots x $160 x 12 months - 10% vacancy (POH turnover) - 35% operating expenses = $43,804.80 NOI * 10 CAP = $438,048 park value
I figure that I have to offer something for the 39 POH's so I just checked the county assessor's website where the park is located and found that the county has assessed the 39 POH's at $305,800.
So, the most this deal is worth, in my limited experience, is $438,048 + $305,800 = $743,800.
Am I missing something?
Are my calculations off?
Should I even bother sending in an offer at $743,800?
Thanks in advance for your help and feedback.