Park Purchase Deal Review


#1

I’m looking to purchase my first park and could use a knowledgeable review of a deal. I’ll try to hit all the important points. The park is in a small town (12k pop) and is the only park in the town as far as I can tell, Other bigger parks are about 5-10 minutes away. Great demographics for the town -$150k med home price, 4% Unemployment, 65k avg household income. The MSA is large at 2M+ pop with under 5% Unemployment, $140k med home price, and $50k avg income.

The Park
24 spaces
21 tenant owned homes
0 POH
Lot rents are in line with local competition at $250
City Water (Park Pays)
City Sewer (Park Pays)
Older homes, the city has not allowed new homes to enter the park. I would have to get this cleared up before closing but assuming I could get this agreed to by the city.
Lots look small and most mobiles look to be 60 footers.
Park is currently running at a 50% expense ratio.
When I ran my numbers I came up with a $315k price.
21x250x12= $63,000 rev x 50% = $31,500 NOI /10% Cap = $315k with upside for water and possible three extra lots.

Am I missing anything?


#2

Sounds like your visit to City Hall is critical.