first off i just want to say the MHPS is a great site! i have learned more about the MHP business thru this site and forum moderators than anywhere else and i have a relative who has been in the MHP business for 25+ yrs. don’t get me wrong he has been a great asset, but not near as knowlegdable as most of you are.
need some advice …i have been trying to buy my first park for over 2 months now…i have made a number of offers on smaller parks using the information i have learned from this site… my offers are based only on space rents. i’m looking for parks with below market rents, and that i can sub-meter to increase value and try to sell in the next year. what i am finding is that most sellers are not willing to do a full carryback and are not that flexible on price. they advertise the park at a 10%+ cap but the real numbers in my opinion are closer to 7-8 cap. i do not have a problem trying to obtain financing, but when i put the seller numbers together and then include the additional expenses the lenders are going to require such as capital expenditures, collection allowances, proper payroll expeditures…ect. then price the deal at a 10% cap i’m usually 30-40% under their ask price. i understand this is part of the “game”, but it’s getting frustrating.
advice i need
do i just keep pluggin along or go back to sellers and justify my price?
should i add value to potential rent increase or just use existing rents when i calculate a value for a park?
what’s the best way to present an offer… with just a price offer or a written explanation how i came to a price along with the offer?
any advice would be much appriciated.