Deal Analysis

All, I am interested in a park and only have the preliminary information which is listed below. Please let me know what this park is worth. Located in the Florida Panhandle near major employers City water/sewer/trash, electricAll park owned homes (50), all occupiedSingle and Double wides (unsure where the park sits with it’s rent level against the market)Paved roads, longer term tenants Seller represents expenses to be 30% but I think they should be 40% as the park pays water/sewer/trashProbably an 8 cap in that market 50 pads x $350 rent x 12 x .6 x 10 = $1,260,000The primary consideration is the ability to increase rents.

100% park-owned homes means that you’re going to have to have really compelling numbers to make it worth the pain and suffering. I assume the plan will be to rent the homes under a rent/credit agreement until such time as the tenant has enough credits and/or cash to buy them. In that case, I would internally allocate the lot rent up substantially since nobody will know until they own the home. Maybe take the lot rent from $350 to $395 day one. On the homes themselves, you will have to make sure that you budgeted enough to handle repeated renovations until you find a tenant who “sticks”.Your value for the lots looks accurate – but I’m betting they’ll want some value for the 50 homes, too.