Location: Located in a suburb in metro of several hundred thousand. Median home prices of main city in metro of $114k, suburb $170k. Largest school system in area is not highly rated. Park is located in suburb with highest rates school in metro.
Park: Asking $4.5 million. 263 pads, 85% occupied, 100% lot rentals, Lot rents average $285 (includes water/sewer/trash), city utilities, master meter water paid for by park, paved roads, swimming pool
Upside:
- Only one other small park in same school district, and it’s a dump. I don’t know the lot rents because I can’t find anyone to ask. Gravel roads, old homes, etc.
- Market lot rent is probably $330+ based on other parks in the metro (but in inferior school districts). All of them charge tenants for water and most charge for trash.
- Could market to other parks’ tenants to pay to move their homes to better school district. With lot rents of $330 would recover cost in 12-15 months.
- Bring in new homes with Cash Program
- Has some space where self-storage could potentially be built and rented to residents
- I’ve personally known the owner for several years. He’s already had a couple of offers in the 4 to 4.1 range. Might do owner financing with higher offer.
This would be my first park, and I would have other partners in the deal. I’ve done SFH rentals so I have a good grasp of concepts, etc.
Thoughts?