Hi all -
I am currently thinking of making an offer on the following park:
Location: Working class suburb (pop 18,000) 6 miles south of Buffalo, NY (pop 280,000) and within the Buffalo Niagara Metropolitan area (pop 1,100,000).
Suburb population decreased 6% since 2000
Buffalo population decreased 12% since 2000
Metro area population decreased 2% since 2000
There are 4 other parks within a half mile. One small one is full,Two are almost fully occupied, the fourth is at 50% vacancy. Their lot rents range from $290-$335.
Rentometer shows an average 2bd apt rent for the suburb of $460/m
Craigslist shows 2b apts at the $600-700 range
84 occupied and paying lot rent of $320/m
11 POH paying $320 total, no additional rent
12 vacant homes
29 lots vacant
City Water (not separately metered)
Owner’s stated Gross Income: $322,560
Owner’s stated Expenses: ($161,243)
Recent Appraisal Estimated Expenses: ($187,013)
NOI using this expense number: $135,547
Appraisal Value: $1,525,000
Asking Price: $1,500,000
Using the appraisal expense estimate puts the park at:
12 CAP = $1,129,558.33
10 CAP = $1,350,547.00
Broker indicates owner will not accept anything below 1.2-1.3. Current offer on the table for 1.0mm, according to broker the owner is unhappy with this but has agreed to discuss with the offeror.
My main concern is the competition from the four nearby parks and the low rent rate for 2bd apts in the area.
I have posted a test ad at $575 lot rent incl and will update this thread with any results over the next few days.
Any other thoughts greatly appreciated.