I have come across an interesting situation/opportunity with my park. I’m hoping some of you financially savvy people on here can help me out…
My park is 22 acres with 20 existing lots. I purchased it about 2-1/2 years ago. I had to evict 7 tenants, giving me a 65% occupancy, I’ve demolished 5 abandoned trailers that were beyond repair, built 2 new concrete pads, moved in a brand new single-wide currently for sale, replaced the entire park’s water system and had each lot individually metered and direct billed to tenants by the water district, paid for permit applications/civil engineering for the expansion of the park (additional 31 lots soon to be approved), and many many aesthetic upgrades around the park (painted the park owned sheds, hauled dumpsters of garbage out of the woods line and behind trailers, etc).
To date, I have almost matched the sale price in capital contributions for all these upgrades and improvements. All that is left to do is fill the park with good tenants. A company has approached me about buying my park from me. If I sold it, I could go after a much bigger, established park I have had my eyes on for a while. To determine what I would let the park go for, I factored in the following:
Balance owed to the bank for mortgage
Money spent on capital improvements (water system, other upgrades at park)
Money spent on civil engineering for water system replacement & permitting for 31 new lots
Any other money I personally put into the business expecting to get back once the park was stabilized
Also, I have never taken any money out of the park.
Am I forgetting to incude anything here? Should I add in the equity I built over the years by paying the loan?
I know this deal will be hard for the buyer to get financed because the bank will most likely not see the value beyond the existing trailer park, but this isn’t really my problem to solve. If it doesn’t sell, I’ll just keep on with the original plan. Any advice here would be great!