Any ideas on what is this park worth?

I contacted the owner of a park that is right next to my house and he said he wants to sell. He’s 89 years old and is ready to give it up.

25 lots with 22 filled
Lot rent $420
The lots are a good size and half have DW and other half SW
Potential to build out 4 more lots
It’s on a well and septic with public water and sewer available (I think the city’s fee is about 10K for the hook up per pad)

Sorry I don’t know more but I am still digging.

22 lots occupied x $420 per month x 12 x .6 x 10 = $665,280 at a 10% cap rate, but the big problem with this park is the water well and septic system on a park this small. If you can connect to city water and sewer, that’s great, but you have to put the highest cost and then deduct that from $665,280 to get the real price. And don’t forget that you have to re-pipe the entire sewer system to go to city sewer, as sewer is not pressurized and septic has no collection point.

1 Like

Could I simply hook up to the sewer and pipe everything out for water but not hook it up. It would be available and ready If needed but this could possibly save a lot of money if there are no future issues with the well water.

If you have access to city water, and the cost for connection is already built into the budget, then I’d connect. Well water does not cost less than city water if you add the various components of reserves to replace the well, cost of testing and monitoring, chlorine, electricity, insurance, and some value on your time for worrying.

Thanks for the advice. I’m putting it into my budget.