I am seeking advice on my first deal. I have already met with the owner and driven the property. Here are the details:
Asking price: $250,000
Lots: 32 (TOH only)
1 house (3bed/2bath)
The property is located of a 4 lane highway 35 minutes away from a small metro area. The town it is in has very little apartments. Low wages and low median house prices. Lot rents currently $100/each. I called around one 8 miles away is at $150 but includes water. Another is POH $550. I figure lot rents should be able to go to atleast $125 if not $150. Currently 28 lots are rented the other 4 pads are empty. House rents for $550. Owner pays business license, liability insurance, property tax and dumpster fee listed below. Property runs on septic (2 homes share 1 septic) and city water. Owner states no lawsuits in the past or present. Owner is willing to owner finance.
$100 x 28 = $2800 + $550 = $3350
Dumpster fee - $190/month
Business license - $8/month
Prop. Tax - $58/month
Liability insurance - $63/month
I have added in for my own numbers
Capex septic - $150/month
Capex other - $100/month
Vacancy - $150/month
Legal - $290/month (not quoted just a guess)
Accounting - $100/month (not quoted just a guess)
Collections - 2% Rev
Anything I missed on this short summary please ask.
One of my main concerns outside of the financials:
The city has a law from 1957 against single wide trailers but the owner does not have a certificate of zoning saying he’s non conforming. It’s a small town so he sees nobody cares.
Please let me know if you have dealt with this zoning issue. Please provide input for additional expenses not listed. Thoughts on raising rents based on the only 2 parks within 10 miles.