Park value question - lot rent high


#1

I’ve read Ernest and Steve’s book and have a question about how lot rents that are too high for the area affect the purchase price. I am in southern WI and I found a park for sale that is located halfway between two of our larger cities, Madison and Janesville (about 20 miles from each). This is an older park with 17 pads, 12 filled, 3 with homes for sale by the park and 2 empty. The lot rent is $380.00, which includes water, sewer and trash pickup, but even at that it is anywhere from $50.00 to $100.00 higher than what other parks are charging in the area. The park is listed for $330,000.00 and using the techniques in the book this is a little high but if I use what I think are realistic lot rents (I haven’t looked into what everyone is paying as I want to know how to proceed), this price is way too high. Any input would be appreciated.


#2

Use your numbers, not what the seller has if yours are more realistic.