As we all know, getting a new park zoned, permitted and built is nearly impossible (at least in my area of Florida). Current park owners are asking insane amounts(30-40k per space) for dried up parks with all of the juice squeezed out of them.
A park recently came available in a fairly good MSA with area lot rents around 300-350 per lot. Price is around 12k per space. The park is a mess of disjointed residences from 60’s mobile homes, old 5th wheels, occasional Bus plus the odd double wide etc. Hate the current condition but love the price.
Has anyone come up with a pricing model of just throwing everyone out, bringing a park up to snuff and then starting like it is new? While empty lots are generally considered of no value, there has to be some way to come out ahead, if it took another 12k per lot to get them redone and a new home in (part of the 12k being interest back to the investment side). I would have a filled lot at 24k and probably netting 2400 per year (assuming 40% expenses) which meets my minimum 10% cap.
Just throwing something out for discussion.
Looked at several parks in Florida and decided to stay away because overpriced and many areas have zoning with grandfathered status or restricting parks from bringing in new homes. Looked at one park that had 35 old trailers that were redone several times One burned and could not be replaced so lot remains empty five years later. Be careful.
It would depend entirely on the regulations regarding replacement of homes and the market. You need to insure you can sell the homes, you do not want to be investing in POHs.
I would be basing the price on the present income. That is the only/primary number that matters. From there you discount based on condition and neglected infrastructure.
Initially turning the park around would be a secondary issue provided the present income is positive. The turn around would be extended over the next 10 years. Buy older homes as they come available. Move /renovate as necessary, boot out undesirable residents and RVs.
Invest for the present income and turn around slowly over the next decade. Assuming you have the desire this would afford you the ability to invest in additional parks.