Metro Population is about 250K, but is declining at 7%
The small town of 5500 that park is located is declining over 10%
All of the other stats are solid with low unemployment, lots of jobs, household income over 40k, etc.
The park is full with 134 usable sites 100% occupied and 8 vacant homes
There is a state university nearby and all the usual big box retailers, etc. etc.
Muni Water
Septics are big issue with DEC, which park flipping group selling to us is going to remedy by installing all new septic tanks and leech fields
Park will be “turn key” when we purchase at 10% cap based on owners tax returns
Lot rents can be raised another $50 a month to bring up to market
Overall, this seems like a sweet deal except for the declining market. Like most park buyers, we’re investing for cash flow and NOT appreciation. I’d love to know what the good people on here think. Thanks! - Kyle
Well sure they’re both benefits and you of course hope for both. However, if you’re strategy is to gain appreciation you’re relying on a market upswing and then you either have to sell or refinance to capture the gain. If you invest for cash flow it’s simply the surplus of income over expenses and you can put money in your pocket regardless of what the market does. We feel the latter is usually the safer bet.
Here’s a quick update on this topic for anyone who’s interested. I spoke with Frank about this and he raised a good point. As long as the rest of the market stats were solid, he wouldn’t walk the deal just because of a declining market. In fact, he mentioned they’ve purchased in several declining markets. The more telling statistic is the vacant housing (especially vacant rental housing). If this stat is acceptable, then it may be worth exploring further. Of course, due diligence is always crucial and as Jhutson pointed out, a good test ad will tell an important part of the story. Good luck everyone and happy hunting! - Kyle