Deal or no deal?

Struggling to make up my mind over a potential deal.$400K33 sites32 lot rent only - $260/mnth 1 POHouse - rented1 vacancy City sewer - paid by park (12-13k/year)Well waterAsphalt 11 CapPlan: submeter and direct bill city water and sewer (if sewer is there, water should be available.) That alone increases cap by 3. Two problems I’m trying to assess:1. Very small town (not in southeast) 2. Back side of property is in 100 flood plain.  Currently has traditional financing so a bank was comfortable with that fact.I appreciate all advice.

On first analysis, 32 x $260 x 12 x .6 x 10 = $599,040 at a 10% cap rate. At $400,000, this is a 15% cap rate and not 11%. The deal’s issues are not financial.Connecting to city water would definitely be worthwhile, if you can do it. The floodplain issue will depend on how many lots effected, how deep, and how often it has happened in the past. The market dynamics can be resolved with a test ad and a greater knowledge of what makes the economy work and what the prevailing home and apartment prices are.But the bottom line is that you should tie it up immediately before somebody else does, and then do some diligence on it.