Calculating Value

Hello MHU family, I have been building a database to find off market deals and have now began reaching out to my list. I have found a seller who is willing to sell but he does not have a “number” in mind. He inherited the park from his father and has now interest in managing it. The market is great and is very close to Walmart and is in a part of town which is being heavily developed. In fact, the city recently built a new park/outdoor event space right in front of the park. The rents are $100 below market with landlord paying water/sewer. It is on both city water and city sewer, I drove the park and the roads are paved with the above ground infrastructure appearing well maintained. I have been looking at deals for the past few months and this is one I am most interested in as I can create value right away with out having to put up much capital.

The park is 39 lots all TOH at $200 a month, with three efficiency units and a single family home which the owner’s father lived on. I want to make an offer and want to know what a fair offer would be. Based on 39 lots @ 200 a month at a 12 cap and a .6 expense ration I am at $468,000 the location is great and I believe that has some value as well. If I buy anywhere in the $500,000 I can create significant value to a future buyer. What value should I place on the ancillary structures. What would a fair offer be so that I don’t offend him? With a 50% rent bump and billing back utilities what can I pay today to sell with a significant profit in 2 years? Any feedback is appreciated and this forum has been an amazing source of info for me.
P:S I am in Alabama and it is a senior park.

Stay safe.
Nick

If he doesnt have a number good luck, he wants to be impressed with yours. You have to pull out his ‘number range’ of thinking or you may overpay. Keep talking to him.

Ok, I don’t want to name my price before he names his so I will push him for a number first. Will keep updating. I know that if I pay between 500 - 600k I can create enough NOI to create significant value.