Long time lurker but looking for some advice on making an offer on a park. 68 occupied lots paying $410 a month, all TOH. Park maintains two wells (they alternate), as well as ~40 septic systems (2 homes per). Paved roads, roughly 1/4 acre lot per home. Meticulously maintained.
Great market, ~9k population up 50% since 2000. On the outskirts of the Boston metro market in a rapidly growing town. $250k avg home price, 2.4% unemployment, $1,100 2br rent, $92k median family income.
Now the upside. Market rents are $450 (one nearby is at $550 with no loss of vacancy). 32 lots that can be developed.
My gut says something with this upside should be valued more at an 8 CAP than a 10 CAP, i.e. 68x410x12x.7/.08 = 2.9 million. My partner and I live nearby and own the necessary machinery to develop the lots/install septics on the cheap.
What would you offer?