2309 Highway 76 East, Marion SC
Price is $275K, he won’t carry anything back
45 spaces
12 lot rent
28 park owned (would sell those to tenants on owner financing/rent to own to get to lot rent)
5 Vacant
park homes rent $400-425
lot rent currently $125- think market is 175-200, but not many parks around so has been hard to get numbers
3 bed houses rent in nearest large(ish) city of Florence SC (30 mins away) rent for $800-900
city water and sewer
small park footprint wise, just 2 roads- 1 paved 1 dirt- and all houses in the middle of it
Marion SC, super small town, but is 10 min from super walmart, 30 min from Florence, that is the nearest MSA (technically Marion is not in one)
Marion small, slowly dying town; Florence growing, solid city/town
I am pro forma-ing it at $150/space lot rent, 40 spaces, $6K/mo, after 45% to expenses is $3,300/mo net/mo… which is $39,600 net/year
14.4 cap on property pro forma
12 cap on property based on 125/mo lot rent at 40 spaces. However, neither current nor pro forma numbers include the value of the 28 POH that we will be getting as well and selling on owner financing back to the tenants. It also doesn’t include the bump in rents we’ll get for 4,5,6 years while those park houses are being owner financed to tenants.
My biggest question mark is the little town it’s in. I’m unsure if should be concerned about slowly dying immediate city is in. Florence is where most people work from my understanding. Diversity of employment in florence seems pretty good for smallish city/town. Florence metro good growth since 2000, like 17%, low unemployment, everything looks solid there.
Thanks for any feedback, suggestions, or other things I should be looking more into!
@DCinvestor - My biggest point of concern for this park will be if this is a renters or owners market. Some markets are more geared towards renters than others. It seems like a deal on paper, but my concern would actually getting the 28 POHs off your books with qualified owners.
I would want to be confident that people travel to Florence for work. If it is a dying town and Florence is growing, it feels like something is off with that analysis.
@DCinvestor - Sure, what are the other parks in the area like? Are they all POHs or lot rents? What are their lot rents? Do people respond to your test ad on wanting to purchase? How much will they put down?
I’m probably being overly selective. I’ve heard some MHP owners say it’s a tough market to work in, and I’m focused on other metros in the southeast. If there was a screaming deal I might consider it, but I’m not even sending direct mail to that market.
As you know, Frank says outside of the metro you’re rolling the dice on future financing / sale. We own in Florence and think the market is “pretty good” but outside of the metro (even with city water and sewer which is nice) would rule it out for us unless there is some large upside. We just raised to $280 lot rent in Florence. That might give you some upside but 30 min away and no metro would be the other side. I’m not on here too often but feel free to contact me if you’d like to talk. Andy