I’m looking to buy my first park. Here are the details:
66 units
58 currently filled
FEMA has just started the process of filling the 8 vacant lots with FEMA homes for 18 months
3 POH (all 2017s priced at $63k, $63K, and $54k)
City water/sewer that is billed back to the tenants (water collection has been spotty, though); owner covers trash
$295 current lot rent - maybe a little low but not too far off market
Park is in a major metro area but on the outskirts of that area (about 30 miles away).
Paved roads with a parking pad on each lot
Park is mostly older homes but not trashy for the most part
No owner financing and it listed it at $1.6M. What is a fair price for this park?
Looks like a pretty good deal to me. What condition are the POH’s in? If the actual wholesale value of those POH’s is accurate I’d go for it. Looks like the park is selling at around a 9cap, maybe a little lower?
58 x 295 = $17,110
$17,110 x .6 = $10,226
$10,226 x 12 = $123,192
$123,192 / .09 = $1.368M
$1,368,000 + $180k for POH = $1,548,000
I would be careful letting FEMA put homes in. Last time one of my clients did so, they installed the homes with front and rear steps only. No underpinning. And there was no landlord allowed screening of the residents. Residents did not comply with lease terms or rules and regulations . . . and there was no recourse to force compliance. After 18 mo. they were sold the home for $1.00