Looking at a park


#1

I am attending the MHM6 and will be bringing some details of a park I am looking at. I would love to spend some time getting an education on the details of buying and using an actual park would help me, if someone would be so kind as to help me.

I spent all day yesterday looking at this park and talking with the owner.

It is an 84 space park, 66 lots rented, 5 lots vacant, 13 lots with junker homes that need to be pulled. Lot rent is $150. It also has a house that rents for $450.

There is space to add 6-7 lots after some land clearing and utilities are added.

The main entrance corner is in the town limits and mobiles cannot be placed here. I am thinking a mini-storage, laundry mat or modulars on foundations.

There is 10.5 acres land next door that the same owner wants to sell and could easily be used to expand the park.

The park has 6 wells of which only 3 are now being used and city sewer. The city meters water usage off the wells and bills for the sewer. City water is available for this park and for the expansion.

The park was built in 1990 and the first row of homes have mostly 100 amp service that will need to be upgraded.

Gravel roads that are in good shape. Trash service is free via county taxes, park provides dumpsters. Owner is throwing in a Vermeer trencher and a tractor with the purchase.

Asking price is $1.15mil. I was told within 5 minutes of being there owner would take $700 - $750. He also wants $150K for the 10.5 acres.

Here is what I come up with;

66 lots x $150 x 60 = $ 594K

1 house x $450 x 48 = $ 21,600

5 empty lots x $150 = $ 22,500

Total $ 638,100

13 lots w/ junker homes at no value, I figure the cost to move and dump will at least equal value of the lot utilities or that is what I am going to tell the owner. Plan is hope to sell cheaply $500 to locals needing a hunting shack or storage and have them move it. Homes are quite bad.

There is a new ethanol plant being built that will employ 100 at an wage higher than the $30k avg. for the area.

Plan to option the purchase of the 10.5 acres while I work on the park then buy it for the expansion.

I know there are at least 100 things I have left out and will need to look for. Please let me have your list, I am trying to get as much info as possible to bring to the MHM6. Even if this park does not work out the process of going through this will be great. This is one the few parks I have looked at.

Park has been on the market for 2 years with no lookers last year and a few this year. I think I am the first one to physically look at it this year. The park is in VA. Also the owner is pushing 60, his son was killed a fews years ago and it appears he has let things slide. His motivation in selling is he wants to buy a bigger helicopter.

Let me have it

Thanks,

Wayne


#2

Wayne,

Just a few quick thoughts for you:

-don’t count on the ethanol plant, some proposed plants are being canceled due to the high cost of corn making them less practical.

-wells can be a big concern, in your DD be sure to call the state as well as the county, as the county could be generally clueless but the state folks will have more info on regulation and liability

-if the guy is selling to buy a bigger helicopter that implies he’s not hurting for money, and you could maybe negotiate some terms that help you out- like a lease/option that allows you to walk away if the well issue blows up.

good luck,

Anne


#3

Thanks for the feedback and the emails.

Got the rent rolls today and the situation is worse than what I imagined. The 66 paying lots I guessed is really like 56. Which brings down the offer but it seems the owner still figures on getting $1.15Mil. told the broker he would throw in the land for a full price offer and wants $500K down.

Anway, would still like to work through the details and come up with a price that most on here would pay. I know many variables exist when it comes right down to it. But this would be a good learning process for me.

Thanks,

Wayne