So let’s get to it. The deal is as follows:
City population 60,000. Median home price is $250,000 in the area. Average price for 2 bedroom apartments is $950. The park is on city water/sewer master metered to the park. Currently, there are 19 lots rented at 310 per month, and the lot rent for parks in the area is 350+ water and sewer. There is room for 5 other lots to be developed. There is also a SFH on the property that is 3 bedrooms and near the corner of the property, so whether this would be able to be parceled off and sold I’m not sure. The roads will need some improvement (not as far as replacing all the sub-base). Most of the homes are mid 80s and 90s and there are no POH.
As for valuation, the parks expenses supposedly run about 45% from P&L so my valuation at a 10 cap is $310 x 19units x 12months x.55= $38,874 /.1= $388,740 + 75000 for the home (sold to cash buyer for hopeful quick turnaround) totaling $463740.
My questions are what have people run into as far as difficulty parceling off a SFH. I understand the bank will probably want a decent chunk of this money unless I can convince them it will appraise higher, but since there are things that can be done to increase the value substantially (put infrastructure for 5 other lots, submeter the park, raise rents etc) how likely is it to convince a bank to allow me to keep a portion for capital improvements? What would be the best way to go about this?
Also, I was curious as to other peoples expenses when submetering utilities and possible pitfalls to be cognizant of. From reading on this forum, its seems that about $400 per site is a fair price to meter utilities? Any suggestions/info are, as always, appreciated!