Hi Folks -
I have been an all too infrequent participant to this forum. But when I do have the time, I am always impressed with the wealth of knowledge here.
Now - the Q: Lots of info here on how to BUY a park - how about how to SELL a park?
A few months ago (in Oct or Nov) I posted a very lengthy commentary on a struggling park I own and asked (and received) for advice on how to get it turned around. I really appreciate those that offered some good advice.
I have good news that many of those suggestions have taking hold - most importantly - be a more active owner and take over most of the management duties. IT has been hard - but finally making strides.
I overpaid for the park (I have since learned from the forum) because I was buying based on total rents collected (lot rent plus singlewide rental). I think someone posted that I was really in the Apartment Rental Business and not in the MHP business. Fair statement.
So - ready to sell - got a buyer interested -want a fair price for both. Please assist me in how to come up with that.
Here are all the #'s - let me know what I am forgetting:
11 acres - beautiful setting with large pond for fishing and each rental has it’s own metal 2 car canopy. Everyone comments on the lovely setting. see pics.
21 lots all with singles wides, 1 cabin, and 1 nice doublewide.
Of the 21 lots, 19 have POH’s on them.
Doublewide: $700/mth (this is only value put on it by me, not income b/c free for manager. I was getting $700 though with no problem 6 months ago)
19 singlewides & lots: ~$450/mth(average - some more some less depending 2 BR or 3 BR) But 4 have been and are unihabitable for awhile b/c little too much $ to repair and I don’t have it presently)
2 lots only- $175/mth
So in summary (600x1)+(16x$450)+(2x$175)= current cash flow if park is as full as it could be (which it isn’t - usually 4 are empty at any given time. Meaning of the 16 that are currently inhabitable - only 12 are occupied at a given time due to move-in’s/move-outs).
Well and septic is only thing included in rent. I have been so fortunate the last 5 years of ownership to never have any major issues with water or septic (Other than occasional leaks, etc…) All trash disposal is on them plus all other utilities.
The manager fees are a little tricky since my ‘re-do’ of the park - I changed how to do it. Not sure it’s the best way but the guy is trustworthy, hard working the last 6 months, does a lot of little things for no extra fee, etc… Basically he gets free rent of the doublewide to manage the park. All power, gas, phone, cable, etc… is on him - not me. I just give him the use of the 2004 DW with 4 BR, 2,000 sqft - big decks, etc… very nice.
I paid $415K for it 5 years ago. I am and have been a terrible record keeper. So, if the buyer asks for rent rolls, etc… I have some - nothing too detailed. I do have the tax returns me CPA has prepared - I don’t understand half of what they say. As long as it was making more $ than was going out - I left it alone (wife ran it from afar for first 3.5 years) . Then, as I said in previous posting - about a year ago - it started going down hill - mainly our fault for absenteeism.
Any help is appreciated on helping me figure out a fair and reasonable price. The buyer apparently has substantial cash to put down (in the $400K range) so that affect your answers??