How to value park owned homes


#1

Is there a quick way to value the homes that are being sold with a park?

My thoughts were 2 ways, the first was to get out the book and figure the value on each one but the problem I was having besides the time factor was that there is not enough information provided from the listings.

The second thought was to run the numbers backwards knowing what I could charge for a monthly payment based upon the lot rent and the avg. 2 bed apartment rent in the area, then I could play with the term of the loan and the interest rate.

Then I questioned that method due to the fact that the homes range so much in size and age…

Looking for some input…any and all would be appreciated.

Paul


#2

I go to the wholesale value of a home in my park. In my park it costs between $12000 and $14000 to buy a single wide 1995 or newer repo and set it up for sale. I would try to never pay more than that cost. This cost varies from area to area. You need to know this cost as part of your due diligence. I place a lot less value on older homes if any value at all. You must always consider what you can ultimately sell the home for and make reasonable profit. Hope this helps


#3

Thanks for the feedback and yes it helps. I will start doing my research on Repos in the area.

Paul


#4

and what we are figuring is 10 times the monthly rental amount less lot rent so for a s/w at 600 per month less 200 lot rent 4K. For a d/w at 850 per month less 225 lot rent 6,250…this works for me!

I don’t know of a more equitable way to value…NADA is useless for older homes.

Good Luck,

Greg Meade