9 unit park, 5 park owned homes(2 rented 500 per months each) 4 empty lots. County water, septic, county approved to bring 4 more homes in. Seller want 100,000? With some elbow grease and 50k (I have 4 homes in storage at my farm ironically that can go in park) I would manage the park myself and it’s in a Very nice area! Any thoughts would be great!!
Thanks,
Pat
To clarify the community has 9 lots with a total of 5 homes all of which are park owned. Of the 5 homes in the community only 2 are occupied.
First step is to determine what the market lot rents are in your area at surrounding communities.
Lot rent is the driver for evaluating the value of a community.
Thanks for your response! You are correct on the clarification. The market rent for just lots in the area is 250. Per month with water. My goal was to have the park filled with all park owned homes at 650 per month within 6 months. I’m not financing the park and it is close to my home… I really appreciate your advice and guidance!!!
You need to consider your exit strategy when going in. A community with only POHs will be difficult to sell as most community owners want nothing to do with POHs. They are at best a break even venture and very high maintenance. The only profit source is the lot rent. For this reason the community value is based on the park rent. In your case you have two rented lots at $250/month income.
Based on that and the estimated value of the existing homes the community is worth very little beyond the value of the land.