Currently looking at a 65 unit park in the upper Midwest. Owner dies. Leaving the adult children to tend to it. $260/ unit 51 lots rented. 6 poh, $500/ unit. City water/sewer, park pays for. Tenants take care of trash. Maybe 7 tenants need to be evicted. Thoughts on what to offer?
Around $950k if you keep the 7 tenants. Was there an asking price?
No asking price, feeling them out I can see they want over $1m. The park has no debt and a manager so time in on there side
I did my calculation based on expenses being 40% and a cap rate of around 10. You should feel comfortable going in at $1m or a little more with the condition that you have the right to reduce your price to cover deferred maintenance items.
@tmperrault Great info. Did you give any value to the 6 POHs, if so what would that number be?
Thanks in advance
1million seems a little high without knowing the exact market. The 6 POH’s are not included in your 51, correct? What are the lot rents of the other parks in the area and what’s the average home price of a SFH?
I didn’t include the homes or other personal property. To find the value of the homes, I would go to craigslist or NADA to see what amount similar homes are selling for in that particular area - offer no more than 75% of the value. The reason you are offering 75% of the value is that you deserve to make money on the sale of those homes - and you are going to have to invest money to rehab them.
If they have no debt but want a little more than asking then its a great opportunity to get them to carry. They’ll benefit in taxes through installment pay and if you get good terms then that can make up for overpaying. Look for creative win-win solutions. Good luck!
Something I have a question about is, have you asked them what they want for it? Seems as though they must want to sell or the question of price wouldn’t be here, but sometimes, once you crunch your numbers, ask them what they want for it. You might surprise yourself for how low it could be (or outrageous.) First rule of negotiating, do not give your number up first. 
Happy hunting. …
I typed all that then saw this was from last November, what ever happened with this deal?