We had a request by a client to bid for appraisal work on a package of parks. Most of the parks have POH’s, with at least one of the larger parks having more than 50% POH. In addition to financing the parks the lender wants all of the POH’s valued. Most of the parks we look at have minimal park owned homes and the lenders have always asked us not to include a value of the POH. Several questions:
- Any experience in having POH included in the appraisal with a park you purchased or refinanced?
- How were the POH’s valued (income based or sales comparison)?
- What type of expenses and cap rate would be typical on POH income?
- Is the cap rate of the park higher given a high percentage of POH?