Park analysis and help


#1

I’m in the process of analyzing a park, and was looking for some input from the pros.

Park is located in upstate NY, strong demographics.

Occupied pads - 22

Vacant - 1

Average lot rent - $366

Gross income - $96,720

total expenses - $43,830 (45% of gross seems reasonable)

NOI - $52,891

Well/septic water, individually metered

Good condition, approx. 30yrs old, good long term tenants.

Asking price - $574,000 (9.2 cap)

Based on 60/30 rule, I come up with $494,590. Based on 11 cap I come up with $480,820.

Sellers are not interested in carrying back, but are somewhat motivated.

I was thinking of offering $480,000 to gauge interest and motivation - what do you guys/gals think?

I’m still learning the ins and outs of the analysis game, so if I missed anything or didn’t provide enough info, let me know!

Thanks

Ron


#2

Sales Price LTV Interest Rate Amort (months)

$574,000 $430,5007.25% 240

Down Payment: $143,500

if he will not carry are you able to come up with the down payment and new loan on the park? I think if this was in my area my local bank would loan on this deal but I’m not out there looking for national lenders. The above quote I got last year.

I have this spread sheet that just analyzes the deal out five years in advance as you described it and I could send it to you if you are interested–I have not checked all the formulas to see if everything is accurate but you could do that. I used 43% expenses, $10 per space per year rent increase and sell on a 9 cap rate.

60/30 Rule

336602016022$443,520

33630100801$10,080

 Total Offering Price:        $453,600

I get a different 60/30 price than you. Maybe someone else can give us the correct price.


#3

Mike,

Would love to take a look at your spreadsheet.

I think the reason we got different numbers on the 60/30 was that you used $336 lot rent instead of $366.

I did some quick checking and the DP and loan should be OK with similar terms to what you got, and it still cash flows. However, the more I’m thinking about this deal the more I’m thinking to wait it out - I know there are similar opportunities out there with sellers willing to carry back - always a better option in my opinion.

Thanks for the input

Ron