So I have a park under contract. Nice enough(no frills) park built in the 90's with large lots, concrete streets, modern plumbing, electric service, and off street parking. Has a package plant in very good condition with estimated 20+ years of life left. Sewer is at the street.
Lot rents avg $240 per mo which I will have to push to $275 to justify the price. There are other parks within 5 miles getting $280. There are 20 park owned homes included valued at $100K.
Price is $1,700,000 Owner will finance with 20% down ($340,000) at 5% for 300 months. After I rehab 5 homes this will put me at $184,800 NOI roughly and a mortgage of $95,405 and net income of $89,394.
This equals a 26% cash on cash return. Is this a good rate of return for a deal this size? I have a smaller 34 space "trailer park" that earns me 63% cash on cash but it was a turn around whereas this one is not.
I can get this much higher with the upside of filling lots.