Coming soon...30-space park with CAP=11+

Hi All-- I’m close to having this park under contract and once I do, the seller is going to want to move quickly. So, I’m getting the word out a little early just to gauge interest and plant the seed.

Here are the basics on this park:

PRICE: $560,000 (which includes assignment fee); I"m trying to get the seller to finance $260k and the rest would be cash. Would that work for you if everything else looks good? Or would you prefer just traditional bank financing?

CAP RATE: I’ve got it at a 11.5 CAP. The seller’s figures show a 13.7 CAP. Seller shows an expense rate of only 20%, but I used Frank’s formula of 30%.

SIZE : 30 licensed lots; 21 are owner occupied at an average of $365/mo.; 9 are vacant lots (pads with infrastructure in place).

RENTS: No recent rent raises. Rates could be raised soon.

WATER/SEWER: City water/sewer. Water is sub-metered.

METRO: Population = 50,000, but only an hour to Lake Michigan in downtown Chicago; Median home price=$123,000; Vacancy=8%; 3BR Apt.= $1010/mo.

CONDITION: Nice park. Gravel roads. 80’s houses. 4 houses are just barely in a flood plain and may have to get moved 10’ or so if the bank has an issue with them. But they are grandfathered in and the tenants have been there a long time.

If interested, please email me:

Thanks for sharing. Could you post population growth (or decline) stats over the last couple of decades for the county this is located in?

Hi Matt, et al.—
Thanks for your interest. The county in which this park is located has increased in population 1.2% since 2000. And it is located only 40 minutes from a metro of 150,000.

The seller has not worked at in-fill much at all. He’s just been content to rake in the cash flow, as is. The NOI was $76,550 in 2018.

Current lot rents average $365. Merely by filling 9 vacancies and bumping rents to $400 (both of which are quite do-able), the NOI would jump to $93,600. At an 8 CAP, that would make the park worth $1.17MM…a $641,000 profit!! Not bad!

Let me know if you’re interested, or have more questions. THANKS!

If a property is designated Zone AE is that considered high risk and in a flood plain?

AE means that a fraction or all of the property is in a flood zone. Some parks aren’t even affected by the AE designation.

Let me know if you can get the owner to do seller financing. I have about $375,000 max in cash that I can use. Does the owner self manage? I emailed you.