34 lots - 27 occupied, 24 POHs renting for avg of $425, lot rent $200 (but really it could be anything as the seller doesn’t break it out for the rentals) and 3 tenant owned homes. Park pays water & sewer. I think I can raise lot rent easily to $240 and still be $20 below the high for the area. My plan would be to convert all the renters to owners as fast as possible (is a year a fair time table?)
City water, septic sewer (1 tank for every 2-3 homes, total of 14 tanks).
Most of the homes are 2 BR 70’s and 80’s. There are five more vacant POHs needing renovations.
Good MSA target points and test ad averaging 3 calls/day.
I’m under contract at $380k, but after a visit to the park, it has $50k in deferred maintenance (potholes, paving, deck/handrails, cleaning, and some repairs I’m sure are needed on the occupied POHs).
I’m having the septic system inspected tomorrow. Assuming the septic checks out ok, would you do this deal?
24 POHs will take a few years to successfully transfer to owner occupied. You will have some tenant turn over.
The price is OK but the POHs will be a challenge.
I would only do the deal if the area solidly supports the sale of all the homes.
I would run some adds pricing the homes at a true value, do not sell them cheap or the quality of your tenant base will plummet.
I would test the market without using the credit system, advertise to sell the homes outright to buyers that can pay cash or finance themselves.
As for the septic, assuming they have been well maintained, that should not be a concern. I would have the tenants pay for pumping and have it done every second year.
The deal is not too bad but the POHs would be a deal killer for me if the market in sales is not strong.