Hey Guys…going to look at potential purchase just wanted some feedback. Park has 24 spaces and is 98% full. Homes all tenant owned and average lot rent $300. Park advertised as public sewer but water on well. After some checking it looks like there is lift station to sewer that was replaced for around 17k last year, sounds like 2 pumps. It is in good location, 250k metro ten minutes away and average home price 175k. They are asking 450 which puts it around 7.3 cap. I think it’s more like a ten and was going to offer around 325-335. I know I can trim some off expenses to make some of the difference. Park is located 35 minutes from house which is nice for first park but concern about well and lift station. Rough estimate on lift station 10 years??? Or more like 5??? I’ve been trying to talk to local water dept but no one answers to talk about potential tie into main water.
I wouldn’t be too concerned about a lift station, especially since it’s brand new. You’d want to have it inspected to confirm though. Make sure there is more than one pump and that there is a working alarm on it to indicate failure. Learn all you can about the well - learn what the county/city/state requires to maintain it, what’s required for testing and how often testing is required, if there is anything negative about the well recorded with the county/city, what the county’s future plans are relating to wells (more intense testing, etc that may increase your monthly cost to maintain it), how old the well is, the condition of the pump(s), etc…
It sounds like a good deal. Private water testing is expensive. I don’t know what state you’re in but make sure that you talk extensively to the water operator and understand all the costs associated with the well. I had a small park where the well operator ate up most of my profits. I hope you get it at $325k! Will
Sounds good deal! But it depends on you.
23 x $300 x 12 x .6 = $ 49,680. That’s more like an 11% cap if you operate it properly. Market dynamics sound good. I’d tie it up and put some due diligence on it.
Its a good deal. But only you will decide what to do and what’s not to do.
Been almost a year now. Did you end up moving forward on this one?
Nah…the pros didn’t outway the cons…I think it’s actually still for sale. I’m about to be under contract on one and start some DD