This is my first time posting to this board but I have been watching and reading many of posts for a couple of years now. I’m in my early 30’s and am currently negotiating my first deal. It’s for a small park in Tampa Florida. 10 resident owned homes and 10 park owned homes. 100% occupied and rents appear to be about 10% below market. Located in a very nice area.
I’m working on a owner financing deal for $575K purchase price. 175K down, 3 year ballooon at 4.25% owner financed. Banks here will give loans on 50% equity of a park so the 3 years should give us enough time to come up with the other $120K to finance.
Park is in great shaped with many long term residents. On city water and sewer.
The current owner is on the fence about the deal. Is there anything else I can do to sweeten the pot for him besides more money down?
Am I missing anything else generally speaking?
Thank you for any advice.
At current price the park is a 11+% cap.
Price sounds high, but it all depends on the quality/condition of the 10 POHs.Rough back-of-the-envelope valuation is $300 (guess at lot rent) x 20 x 70 = $420,000, plus unknown value of additional 10 POHs. I’m no expert on Tampa, but the parks I’ve looked at there are rough and the homes have dated from the 1960s.Paying an 11% cap rate for:1. such a small park, and 2. (I’m presuming) including the ‘profits’ from the POHs to get to that 11% cap… is not a great deal. Is there more upside in rents or cost control?Good luck,-jl-