Oregon Park


#1

I put a 17 space park up for sale for $575k last fall. It’s one hour north of Portland, Oregon. The park has 6 acres with only 4 acres currently used.

( Park is expandable)Well, septic and gravel roads. Space rent is $305 includes water and cable.

8 park owned homes. After six months and talking to 30 or 40 prospective buyers …not a single offer. So I drop the price to $529k. I proceed to place 5 of the homes on rent to own contracts. The park is in decent condition, decent geographical location…yet no offers. It’s advertised on MHPS.com, newspaper and craigslist and was on loopnet for a while. There’s an assumable loan of $370k @8.625%…I can’t carry paper because I have to repave a 73 space park I own in WA. The reason I mention it here is because I’m a little at a loss why the park remains unsold. Park expenses are low. The park caps out higher than most of the park for sale in WA and Or…yet no deal. I wonder if my price is still too high or if it’s the tightness of the credit markets. Anyone care to comment ?


#2

Darrell,

I just think there are that park just may not be in the sweet spot for most buyers, and the price seems high.

I’m actively looking and I’ll tell you what does not attract me about the park:

  1. Price - Even at a low 25% expense, I’m showing about a $46K NOI. That makes it an 8% cap rate. A smaller park like that should be in the 14-16 range to make it interesting

  2. Smaller park means that onsite management wont make much sense. So it will have to be a local buyer

  3. Gravel roads makes it very difficult to get a loan, especially right now

  4. Park owned homes are a negative (you’re starting to take action in that area)

  5. Assumable loan at 8.625% is higher than market rate and is definitely a negative

These are just the first things that came to me as a buyer when I’m reading the information you supplied. Personally, this isn’t the size park I’m looking for, so take my comments for what they are worth.

The credit market is just making a difficult sale even tougher. The only way I think you’ll be able to sell is to put some sort of owner financing deal into play. I know you said you couldn’t, but I don’t see this property selling any other way.

Good luck.


#3

Thanx for the feedback.


#4

There is one reason a property that is well advertised & marketed does not sell.

Price/terms.