Premium on sweetheart owner financing

I am looking at a park for 400k. The current owner only has 1st that is being financed by the previous owner. The terms are: $120k over 10 years, 0% interest, no balloon, non-recourse, no ‘Due on Sale’ clause, no prepayment penalty, and assumable. There are 9 years left.

What would be a reasonable premium to pay to assume that loan, if any?

Although you provide much detail on the financing, you don’t provide any detail on the park operations. Does it make a profit? Does it make 1k per month? Does it make $100k per month? Without financial detail, your question cannot be answered.

$1k a month for ten years is pick your discount rate. At 12% it’s $70k. So that’s a $50k discount to the par or original principal, if I’m understanding your perspective. If your discount rate is 6% then that’s $90k and the dollar discount is $30k (of imputed interest.)

The park is priced with that in mind…

Are you thinking of assuming the note as the Creditor or the Debtor?

@mPark Thank you for responding, you raise a good point. Here are the numbers:
$400,000, 74 lots, 20% occp., expenses 44%
Lot - $300 (high end of market) includes water, trash
Well Water, City sewer/lift station (two new pumps Fall/18)
Gas/Electric - Direct billed by utility to each tenant
Asphalt roads need repair
TOH/10, POH/10
10 POH rehab canidates - 40-50k
Mid size market - good demand
All homes pre HUD

@Brandon Thank you for responding, I would be assuming the role as debtor.