Owner Financing Possibility



New to the site and to purchasing/owning a MHP. I’ve recently been talking to someone about his MHP. He has 104 lots (with room to put in approx. 50 more) that rent for $225/month each. Bringing in an estimated $250,822 a year after everything, price is $2,200,000 and He wants 7.36% fixed for 78months and then 2.5% ARM above LIBOR for 234 months. Its basically carefree, worry free, but it brings in about $21K/month and the Payment would be at $15.8K/monthly at 7.36% fixed not to mention the possibilities with the 2.5% ARM over LIBOR…

My question is what do you think is a reasonable offer for this? At the fixed rate, I’m looking to bring in less than 25% of the profit and 75.2% go toward payment before the 2.5% ARM above LIBOR. I think I should, at least, make 35% of profit. what would be a logical financial situation? (No Money Down)