I have a mhp that has been in my family for about 30 years. We are kicking around the idea of selling it. Is there a formula or something I can go off to see what a rough estimate would be if I wanted to sell?
From what I been hearing is now is the time to sell because there are a ton of investors looking to purchase property’s and they have money to invest.
There is a formula - but can you share some information about your park?
What is the lot rent?
How many lots in the park?
How many tenants in the park that own their home?
How many tenants in the park that are renting a home from you?
Are yo on city sewer and city water?
Who pays the sewer and water bill, tenant or you?
Generally the formula is: Lot rent x quantity of tenants (x 12) = annual gross revenue. Annual gross revenue x expense ratio (your park possibly has expenses of approx 35% of gross revenue… so 75% x annual gross revenue) = NOI. NOI divided by .075 or .08 or .09 (cap rate you desire. A nicer park will have a lower cap rate) = selling price:
$450 x 92 = $41,400
$41,400 x 12 = $496,800
$496,800 x .75 = $372,600 (NOI)
I don’t want to be pushy or anything like that, but I would be interested in knowing more about your park. I currently own 7 parks in the Midwest and have been looking for quite a while for another purchase.
I’ve sent you a private message with my contact information. I’m happy to discuss how the park should be valued and what fair market value would be.
For a park of that size, I would reach out to a National broker like Colliers to get you top dollar. I imagine this could sell to an institution at a pretty low cap rate (5 or 6 maybe) depending on the market.
Let me tell you, i put my park on the market, and was surprised by the listing price i got from a realtor. I would not have priced it that high, and although we didn’t get full price offers, we got several, above what i expected. They know the market more than anyone at this point! Mobile home parks are especially HOT right now. ALSO, DON’T TRY TO SELL WITHOUT USING A SPECIALIZED REALTOR. THE ONE I HAVE SPECIALIZES IN MHPARKS AND HAS BUYERS AROUND THE COUNTRY. If you decide to sell, you want maximum exposure.
I am a broker with Marcus and Millichap, and while I am on the west coast now, I worked in east coast markets for the last couple years.
I “validate” parks everyday. Depending on the population density of your location and quality of homes, you could sell your park “on-market” for a six cap/(6.5) or possibly less; again depending on the city or town you’re in. If you want a FREE consultation feel free to reach out; Vasili.Arvanitidis@marcusmillichap.com.
Hello Emiller, I am based in the East Coast in Atlanta. I messaged you directly. This meets our acquisition criteria. I have a lot of info on comps locally because I just refinanced our park in Atlanta a few months ago. I am in the middle of identifying a 1031 exchange and would like the opportunity to make you an offer or provide any info that is helpful
We are in the process of talking to a couple different brokers. We also have a couple commercial buildings and apartments as well. So it’s a little more complex then a regular park and we are in a very commercial location. It’s looking like range maybe between 9-12 million. If you are still interested let me know.