Lots of questions


#1

Deal:

South Carolina

50 pads, No POH

lot rent: $250

90% occupancy

Other parks in area avg 94% occ. with lot rent of $300

Sellers wanting to retire and travel; will owner finance at 6% I/O with a 5yr. balloon (20% down)

City water and sewer; metered and billed to each tenant by the city

Before I am able to get the financials, etc. to do my due diligence, this is what I would come up with:

Yrly Gross: 150,000.

Actual: $135,000.

Expenses: $40,500.

NOI: $94,500.

DS: $45,360.

Net: $49,140 ($4095/Mo)

My offer price would be $945,000. (cap rate of 10)

So, my questions are:

  1. Are my numbers anywhere close to what you experienced peeps would come up with before actually doing thorough DD? Am I on the right track?

  2. If my numbers above were actuals, wouldn’t this be considered a good deal? Would any of you be interested in it?

  3. In the above, the seller carries 80%. Assuming I find a FF that has $189,000 for down pymt, would it be fair to offer them 50% of monthly net with them having no management duties? (and also 50% of profits realized at sale)

  4. Assuming that is fair, would we be paying interest monthly on his down payment money like it is a 2nd mortgage?

  5. If we were able to raise lot rent to $300 like all the other parks, how long would we have to season until we could sell the park at that raised value? Same question if we filled the 5 vacancies?

Thanks for your time!

Sandy