Looking for equity partner for an off-market 86 lot park in FL. Seller financing and below market rents


#1

I have an off-market deal with seller financing in central Florida. Significantly below market rents!
Closing date is June 30. Plenty of time for DD. I am going to give some basic information and if you’re interested, please call my cell at (571) 212-6642 or email me at Dominic@djmequity.com or you can message me here.

Pros: Significantly below market rent as mentioned before. Current lot rent is $210. I called every park in town posing as a prospective tenant and the average lot rent the other parks are charging is $450. The outliers are one park is charging $280 and one is charging $750. Either way, this is the lowest lot rent park in town. Within 1 year, we can achieve a 31% cash on cash return assuming rents are only raised to $350 year 1 and the POH’s are sold to tenants for $1.00. I live an hour away from the park and would be able to be on sight daily until operations are running efficiently.

Cons: Significant amount of park owned homes to get rid of. This will be labor intensive and I plan to pour a significant amount of sweat equity into this.

Also, this is 2/3-star park. If you want something that looks beautiful, this isn’t the park for you. Homes are not in terrible condition, but this is definitely an affordable housing community. Selling price is a 5.6% cap if you don’t count income from rentals or stick built homes. After rent raise and expense reductions the park could potentially be a 13%+ cap year 1.

Metro stats:
Population: 118,891. This area has seen a dramatic increase in population the last few years.
Median Home Price: $229,300
3 BR apartment: $1,061. 2BR Apartment: $728.00

Park Stats:
86 Lots total. 80 Occupied. 3 stick-built homes, all occupied.
44 POH
Lot rent is 210. POH Rent is 450 for MH and 350 for RV. 13 RV’s and 31 MH’s owned by park.
City water/Sewer
Price: $2.5 million (I plan on getting this down some during due diligence).
Seller financing terms: 25% down ($650,000, 5.5% interest amortized over 30 years. No prepayment penalty.
Mom and pop haven’t raised lot rent in around a decade.
Market demand: I am waiting on test results from teaser ad now. However, other parks in market charge significantly higher rents and are at or near 100% occupancy.

Plan to maximize return:

  1. Raise rents immediately to at or near market. (This is going to be the biggest increase in short term revenue).
  2. Sell POH’s to current tenants to reduce maintenance expense.
  3. Fill in remaining 6 lots.
  4. Bill back water.
  5. Consider selling 3 stick-built homes. Roofs were recently replaced on 2/3 homes so might want to hold for a little while.
  6. Rent out club house for events. It’s currently used as storage.
  7. Currently only 1 main road in park out of 4 is owned by city. Work on getting city to take over the remaining roads so that maintenance is not parks responsibility.
    My Experience: I currently own a 40-lot park in Alabama that I was able to get to 100% occupancy as well as bring lot rent to market price without losing a single tenant. I have experience installing management as well as overseeing operations. My park was profitable from day 1 and is running very efficiently now.

Conclusion: Obviously the huge upside in this park is the below market rents. This project could be a 1-2 year flip or something to hold long term. I am open to considering either option. Please contact me for details.