I have been reading the forum for some time and I think you guys are a great resource. I come from the single family home arena, where I flipped/ rehabbed/wholesaled/retailed houses for a few years, but have seen the light with the help of Lonnie Scruggs and others. I have located a park that I am very interested in pursuing and wanted to see if I could get a rough value out of some of you. I stole the formula for what you would need to know from RickG, so thanks Rick. This deal is in the Columbus, OH area.
1 - Number of Lots: 51
2 - Vacancies: 3 (no trailer, completely empty)
3 - Property size: 24 acre total, only around 10 acre is used for MH’s
4 - Average Lot Rent: $240
5 - Gross Income: $16810
6 - Expenses: $1800
7 - NOI: $15010
8 - Number of POH: 14
9 - Rent Amount or Lease/Option Payments on POH: 1x400, 1x450, 12x650 includes LR.
- Asking Price.: $1.5mil
I haven’t figured out exactly how the valuation process works yet, hence the need for your help. I know how to run the numbers to determine the monthly payments and cap rate, but the only other valuation tool I have heard of is the formula of 8 times rents. That formula tells me the value would be $1.632 mil. LR has not been raised in 5 years, and all pay their own utilities except for water, which is well and septic. Owner pays this, and does not bill back. Any help will be appreciated. Did I mention I need a partner as well?