Looking at a local park. I have invested in single family and some commercial for almost 20 years in my hometown, and am trying to buy this park. I have contacted the current owners a couple of times over the last 2 years about selling.
Here is the story:
55 lots, 8 totally vacant. A couple in really poor shape and may be vacant.
Lot rent: $195,
City water / sewer (not sure who pays, but would sub-meter right away)
Garbage is city billed.
Property taxes $22,000 year
County / city have a tax value of $382,000.
Park has a bad reputation, with it being the place the cops bust people for drugs or other crime. But remember this is a small midwest town, were not talking ghetto type property either.
Stable midwest city of 16,000.
High rents, low vacancies in the local rental market.
Single-family homes rent for $800 - $1200
Average home price is $180,000, new homes run $300,000 +
Used singles wides in other parks sell for $35-$50,000 when listed.
Competing parks lot rent is $250 - $300 plus utilities
Here is the park that is EXTREMELY frustrating.
The couple who own it, he died about 6 months ago unexpectedly. I had a local RE agent who knows her contact her to inquire about selling. She isn’t sure she wants to sell as it is her income. I tell her I would do a contract sale on the property for 10-15 years to provide her with income (she’s in her mid 60’s). She likes the idea of payments vs a lump sum.
BUT here is the kicker, now she has had a heart attack. There is NO WAY she can run this place, and has no systems in place to run it. It was mainly her husbands baby.
While she has at least been willing to talk (a good sign), she is just not seeing the train coming down the tracks at her. The park will deterioate without someone going in a cleaning the place up. She is dragging her feet, and is slow to provide any details.
I don’t want to pay too much for the property as there this is a rehab type of park, but I want it because it is right in my community, I know the market like the back of my hand, and there is great upside by booting the trouble makers, and bringing in new units with the CASH program.
So what is the secret sauce to get someone like this to move forward? I would like to buy now before it gets any worse.