I think I found my first park... comments welcome

As some folks know, I am starting out after being unemployed for 5 years.  As some others have voiced on this forum, this is a challenging (under statement) proposition when you have more brains and energy, than money or credit line.  I started from nothing and have been flipping over rocks looking for opportunities my whole life.  After several months of searching, think I found one to act on.  All input is welcome.  I am still learning this business.   Going to work at getting under contract by end of next week broker willing.  Here are the pertinent facts:15 spaces (approximately 8-9 SW Mobile sites, 6-7 smaller 1/1 mobile/park model sites, no POHs)Average lot rent - $328 (100% occupancy)Park size - .4 acre (3 tax parcels zoned R4 MH)Water - city (do not know who pays, probably park)Sewer - cityProperty taxes - $1,422 (all 3 parcels)Metro - 1.3 million with 10% growth, located 1/2 block from main thru fare, moderate crime expected for a downtown location.  2/2 apartments run $517-$1,595+.  SFR rentals run $675 - $4,500+.  Downtown location is cleaning up both in crimes and in the neighborhoods.Relevant facts:Estate sale, majority rule of siblings selling MHP.Lot is worth about $300k ($100k per parcel) in a bad market.75% occupied over the last 7 years.  Some residents have been there for 10 years counting.Available lot next door for $350k would double the size of the park and I could go to 30-32 spaces depending on layout.  Would also give me frontage to main drag.Near expressways, bus routes, downtown local.While the County/City have not been real aggressive with making the park more aesthetically better, they may not treat a new owner the same.  Present owners don’t even pay their taxes so county may have given up.  On a good day, this is a shanty town of old trailers and plywood, kitty korner from a tire shop.  May have to come up with cash immediately to make improvements.  Will know more after due diligence.  Upside if I do clean up the park, the rents could move up $100 over the next two years.Expenses are low, so no improvements there, but increased rents with full occupancy is definitely the game plan.Exit strategy with the downtown location and R4 designation I am sure I could sell the lots together to a developer and still profit $100k from the exchange.Action Plan:  I am thinking of extending an offer of $190,000 (realtor indicated $200k might fly) or maybe slightly less once I see actual data and talk to the planning dept, with $30,000 down (per sibling request) asking owners to seller finance the balance of $160,000 at 4% on a 10 year note non-recourse, no pre-payment penalty.  Yes, I know some of this is crazy, but leaving room to negotiate.  If I don’t punch the exit button, it will be all mine in 10 years.Any input, suggestions, warnings, etc. especially over a downtown location in a major city are welcome.  Hoping Frank gives me an A on this one…Thank you  :wink:

The owners don’t pay taxes?  Is there a tax lien against the property?

MattBThey are only in arrears for one year.  The county would attach a lien in 2015.  State law prohibits any property of any sort from being purchased with out a certificate from the government saying that it is current and there is nothing outstanding.  They will take care of this before closing.

DDDeVries, I’m with on the newbie scene. First park in contract as well and scraping together money for two others. All owner financing with 10% down. The only problem I see with this deal is siblings fighting and causing you issues. Once you get the rent roll and have a few months behind you maybe see if you can refinance just to get it clear of family issues with the sellers? Just a though…

Tamalann I am concerned about the siblings as well.  Hence the no prepay penalty.  Keep scraping up the money to pick up those new parks…

Thank you DDDeVries, I’m trying. One closing on the 30th, and working on the next two, all working with owner financing with great mentor mom and pops. :-)