Assessing the Value of an Almost Vacant Park


#1

I’m looking at a park that’s up for auction. It’s 3 acres and has 24 spaces but, only 2 of them are occupied (at $210 a month for each one). It’s in a small town of about 1200 people so, I have a hard time imagining all 24 spaces ever being filled again. Any idea how high I might expect the bid to go for something like this?


#2

unless you have the capital to bring in new homes, and the metro market is over 500k in people, there is a reason it is vacant. This is a huge turnaround project and could be substantial upside if you got it for like a dollar. Your going to have to spend a large amount of capital, even used homes at 10k is 10,000*22=220000.

at full occupancy 2421012*.6/.1=$362,880 price for the sale. Your going to roughly make 142k in a sale if and only if you buy used homes under 10k in price to fill all 22 vacant spaces.

It could be worth it, but you need to figure out what the root cause of the vacancy was and if this meets your investment criteria/returns. Also, what is your time worth, because you could the cash your going to use to buy homes and bring them in and buy a park that is maybe 50-70% occupied and Cash flows 40-60k after debt service. And your going be getting lot more value for your time and capital.


#3

The reason it’s vacant is that the previous owner lived there himself and just liked having a huge yard so, he didn’t have much interest in renting the other spaces.

So, it has a good reason for vacancy, I guess but, still - it’s the only park in town so, filling it up even partially would involve convincing new tenants to move there.


#4

You first must find out from the municipality if you can bring in additional homes and what restrictions if any there are on the community.
I would value it at the going rate in the area for raw land. There is potential however potential is very expensive to build on. Having two homes in my opinion is negative value since maintaining the community for two homes will likely cost more than you can collect in rent.