I am looking for your opinions and comments on this deal.
The park sits on 70 acres. Half of this makes up the park and the other half is occupied by a single family home that could be sold separately.
All of the land is zoned for 20 DU/acre.
There are newer home developments neighboring this park with homes on small lots selling for $125,000.
The park is currently on a well and septic tanks but could be connected to public sewer and water (1300 ft away)
It has 75 lots Â¼ acre each. Each lot has a power pole( many have been vandalized) and septic tank
28 lots have trailers but only 12 are rented. (The vacant trailers are in very rough shape, most have been stripped of wiring)
The 12 are rented at $400/month. For a total monthly income of $5000/month
Market lot rent is $235-250/month.
The expenses for the park are around $4000/month including $850/month for well monitoring
Most of the expenses are fixed.
The park has approximately 1 mile of roads that need to be repaved and Â¼ mile of new road that needs to be paved over the dirt road there now.
The park has been privately offered to me at $500,000 with $100,000 down 7 year balloon. 5% interest non-recourse seller carry. (tax assessed at 725k)
My plan is to buy the park and immediately redo the roads, make the landscaping look nice, and start rehabbing/ bringing in trailers to fill the park.
I will sell all of the trailers RTO.
I ran a test ad for a rent to own trailer and got 20 calls within 24 hours.
I have about 300k to work with and I made the rough assumption that I could fill 4 lots/quarter and each empty lot will initially cost me 10k to fill(will
be paid back in time from the rto payments).
Under that assumption, I will be able to fill all of the lots in 4 years and have a park with a NOI of around 150k and a value around 1.5 Million.
Based on my test ad and other research, I think I can sell these trailers RTO as fast as I can get them ready.
What do you think about this deal?
Am I crazy to think I can make $1,000,000 on this deal in 4 years?