See attachment for more information. This is the most recent data available at this time (the P&L is from 2009)
18 spaces rented at $325/month each. All MHs are tenant owned. On 2.8 acres.
On city sewer and water. The owner pays the sewer, trash and water bills. Each spot has electric, cable tv
hookups.
Any “back of the envolope” idea of what this park is worth?
They are asking $749k but my calculations, thanks to the info on this website, put it more in the $425k range.
Thanks
Just found out that there is a note on the property for $550k. That would explain the high asking price. But the bottom has dropped out of that real estate market and (maybe) the seller is upside down in the property.
Great job of gleaning the correct information – the price should be $425,000 tops (you should probably assign an even higher than 10% cap rate, as it’s pretty small at 18 lots).
The seller probably overpaid for it (clearly) based on his note. If you assume he put 20%+ down, the price he is asking is about what he paid (given him taking some off the price).
Maybe you can buy it on a short sale. Maybe you should just wait for it to back to the bank. Or maybe there’s more to this deal than I’m seeing – I’ve never been there and seen the park, or done any diligence on it. Maybe it’s next to the Hyatt hotel, or something. I hate to put down deals that I know nothing about – but I do like to spread the word of caution so buyers don’t get in trouble.
Great advice Frank, I will keep an eye on the property to see what happens to it. 5 years ago the property would probably have sold for the asking price, but times are different now. At the right price, it may be a good starter property for someone like me.