Hello, all! I’m negotiating hard on my first deal, but the lowest I can get seller is an 8.5% cap. The argument is the location for the park, which is in the Pacific Northwest, is in a location where surrounding properties are selling for much lower caps, and there is inherent value in the land itself. I believe the seller is right, and having looked at West/West Coast/Pacific Northwest properties for a long while now, they indeed seem to be listed at cap rates that are far lower than the 10+% suggested by Rolf and Dave.
So my question is: when, if ever, would you go to an 8.5% cap? Is bare land valuation a consideration? What about owner-financing? If I can get the owner to carry the paper with a low down-payment (say, 10%), would that be worth it?
Thanks in advance!