Saw this old post of yours and thought you might be interested in this deal.
Just got this park under contract and I am looking for a Capital Partner to invest in this exciting, HUGE VALUE ADD opportunity! It’s selling for $1.45M; an 11.5 CAP based on total income; a 29.6% Cash on Cash return; and it is seller financed!
However, the upside is even better! It is essentially a 50-space park now, with 12 vacant sites. But there are 50 more sites with the water, sewer and electric in place. And it includes a total of 40 acres with original plans for yet another 106 sites for a total of 206 sites!! The park’s potential value goes to $2.1M just by filling the 12 vacant sites. By bringing the next 50 sites on line, the value jumps to over $4M. And then to over $10M by completing and filling the other 106 sites.
On top of this huge financial upside, this is possibly the nicest park in Michigan. It was built circa 2000 and has been meticulously cared for, so there is little maintenance expense. It’s got vinyl homes, city water and sewer that are billed back to tenants and is in a “bedroom city” in the solid metro of Lansing-East Lansing.
The Lansing-East Lansing metro markers are:
- size = 472,000
- median home price = $157,666
- 3 BR apartment rent = $1200/mo.
- vacancy rate = 7.9%
- State Capital of Michigan
- Michigan State University and two other colleges
- General Motors factory
- Major employers are: State Government, Michigan St. University, General Motors, Sparrow Health System, Auto-Owners Insurance Group, Lansing Community College, Lansing School District, McLaren Health
There are currently 50 sites (26 POH’s, 12 TOH’s, 12 vacant lots). Average rents are $776 for POH’s and $350 for TOH’s. Annualized income and expenses as of 1/1/20 are: $283,857 and $116,519 respectively, yielding an NOI = $167,338. Included in the deal, but not in the NOI are 26 newer homes conservatively valued at $247,000.
As asset manager, my basic three-stage plan to add value to this park is to:
A) Fill the 12 vacant sites with homes from 21st Mortgage and make them tenant-owned homes. Increase the lot rent across all 50 sites to $400. Keep the 26 homes as rentals for five years to maximize depreciation on them, then turn them into tenant-owned homes. New Park Value @ 8 CAP = $2.1M
B) Complete the roads and pads on the next 50 sites. Add homes and make them tenant-owned. Increase rents to $450/mo. New Park Value @ 8 CAP = $4.725M
C) Do the infrastructure on the remaining 106 sites. Add homes and make them tenant-owned. Raise rents to $500/mo. New Park Value @ 8 CAP = $10.815M
In summary, this is an outstanding income opportunity with an excellent property in a strong metro! With relatively little work we will increase the park’s value over $600k (i.e., Plan A). We have essentially 50 more nearly free sites, and by getting them on line we will increase our investment’s value over $3M (i.e., Plan B). Plan C would take significantly more effort, but that reward is tantalizing to think about, too!
If you are interested in becoming the Capital Partner in this venture, I’m looking forward to hearing from you! Please email Gordon Graham, Landmark Assets, LLC at: gordoncgraham@gmail.com.
THANK YOU for your consideration!
Gordon