I’m looking at a park that is 98 lots and has 81 tenants (all tenant owned). The average lot rent is around $325 and the market is probably more like $425-$450. It was city water/sewer direct billed and is a decent looking park aesthetically and is in a good market and has a good location in that market.
How would you guys value this? The owner wants $4.5m and it feels a little high but am i crazy to be considering $4m here?
I would need to see the entire P/L to give a solid recommendation, but 4 million for the limited description you provided sounds like an excellent deal.
Bottom line: does it cash flow after all expenses including mortgage?
If so, you have 18 lots to in fill which will increase income, as well as, increasing rents to market.
If I was aware of this deal. I would become your competition 
Thanks for the feedback. The deal I’m looking at is “something like those numbers.” TheSteve does not like a ton of competition on a deal!
| Paying Units | Rent | Monthly | Expense % | Expense $$ | Monthly NOI | Annual NOI |
|---|---|---|---|---|---|---|
| 81 | $325.00 | $26,325.00 | 35 | $9,213.75 | $17,111.25 | $205,335.00 |
| 81 | $325.00 | $26,325.00 | 45 | $11,846.25 | $14,478.75 | $173,745.00 |
| 81 | $325.00 | $26,325.00 | 55 | $14,478.75 | $11,846.25 | $142,155.00 |
| NOI | CAP | Value | Value of Vacant Units | |||
| $205,335.00 | 6% | $3,422,250.00 | $180,000.00 | $3,602,250.00 | ||
| $205,335.00 | 7% | $2,933,357.14 | $180,000.00 | |||
| $205,335.00 | 8% | $2,566,687.50 | $180,000.00 | |||
| NOI | CAP | Value | ||||
| $173,745.00 | 6% | $2,895,750.00 | $180,000.00 | |||
| $173,745.00 | 7% | $2,482,071.43 | $180,000.00 | |||
| $173,745.00 | 8% | $2,171,812.50 | $180,000.00 | |||
| NOI | CAP | Value | ||||
| $142,155.00 | 6% | $2,369,250.00 | $180,000.00 | |||
| $142,155.00 | 7% | $2,030,785.71 | $180,000.00 | |||
| $142,155.00 | 8% | $1,776,937.50 | $180,000.00 | $1,956,937.50 | ||
| Value Range | ||||||
| $1,950,000 to $3,600,000 |
| Paying Units | Rent | Monthly | Expense % | Expense $$ | Monthly NOI | Annual NOI |
|---|---|---|---|---|---|---|
| 81 | $425.00 | $34,425.00 | 35 | $12,048.75 | $22,376.25 | $268,515.00 |
| 81 | $425.00 | $34,425.00 | 45 | $15,491.25 | $18,933.75 | $227,205.00 |
| 81 | $425.00 | $34,425.00 | 55 | $18,933.75 | $15,491.25 | $185,895.00 |
| NOI | CAP | Value | Value of Vacant Units | |||
| $268,515.00 | 6% | $4,475,250.00 | $180,000.00 | $4,655,250.00 | ||
| $268,515.00 | 7% | $3,835,928.57 | $180,000.00 | |||
| $268,515.00 | 8% | $3,356,437.50 | $180,000.00 | |||
| NOI | CAP | Value | ||||
| $227,205.00 | 6% | $3,786,750.00 | $180,000.00 | |||
| $227,205.00 | 7% | $3,245,785.71 | $180,000.00 | |||
| $227,205.00 | 8% | $2,840,062.50 | $180,000.00 | |||
| NOI | CAP | Value | ||||
| $185,895.00 | 6% | $3,098,250.00 | $180,000.00 | |||
| $185,895.00 | 7% | $2,655,642.86 | $180,000.00 | |||
| $185,895.00 | 8% | $2,323,687.50 | $180,000.00 | $2,503,687.50 | ||
| Value Range | ||||||
| $2,503,687.50 | to | $4,655,250.00 |
If Full and Rents at $425.00
| Paying Units | Rent | Monthly | Expense % | Expense $$ | Monthly NOI | Annual NOI |
|---|---|---|---|---|---|---|
| 98 | $425.00 | $41,650.00 | 35 | $14,577.50 | $27,072.50 | $324,870.00 |
| 98 | $425.00 | $41,650.00 | 45 | $18,742.50 | $22,907.50 | $274,890.00 |
| 98 | $425.00 | $41,650.00 | 55 | $22,907.50 | $18,742.50 | $224,910.00 |
| NOI | CAP | Value | Value of Vacant Units | |||
| $324,870.00 | 6% | $5,414,500.00 | $180,000.00 | $5,594,500.00 | ||
| $324,870.00 | 7% | $4,641,000.00 | $180,000.00 | |||
| $324,870.00 | 8% | $4,060,875.00 | $180,000.00 | |||
| NOI | CAP | Value | ||||
| $274,890.00 | 6% | $4,581,500.00 | $180,000.00 | |||
| $274,890.00 | 7% | $3,927,000.00 | $180,000.00 | |||
| $274,890.00 | 8% | $3,436,125.00 | $180,000.00 | |||
| NOI | CAP | Value | ||||
| $224,910.00 | 6% | $3,748,500.00 | $180,000.00 | |||
| $224,910.00 | 7% | $3,213,000.00 | $180,000.00 | |||
| $224,910.00 | 8% | $2,811,375.00 | $180,000.00 | $2,991,375.00 | ||
| Value Range | ||||||
| $2,991,375.00 | to | $5,594,500.00 |
Thanks! It feels worthwhile with the potential value created through the upside. It’s also a market where if rates remain high with inflation, I think the market will support rent growth of at least the national inflation reading.
The recent rate environment makes pricing more tricky but I know I’d be all about this deal if rates were around 5.5-6% or under.
Very detailed spreadsheet, how do i get a copy of one of those?
Here you go.
Thanks for the spreadsheet. Im sure Im over thinking this, but where is the $180k value of vacant unit coming from?
“I’m looking at a park that is 98 lots and has 81 tenants (all tenant owned)”
17 Vacant pads.
The $180K came from an estimated $10k per vacant pad. It looks like I made a mistake and used 18 Vacant pads in my calculations. 18 x $10K. Oops.
You can adjust that number to suit your locale. IE Vacant Pad in CA is worth more than a Vacant Pad in Bangor ME.