What are current rates for mobile home parks in the $1 million range? Is it still expected to get a cap rate 3 points higher than the interest rate?
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I’ve been quoted high 6’s up to close to 8% rates in the last few weeks. And no, anything listed is still in the 7-8 cap range. I made an offer off market at a 9 cap and was hung up on. Fun time to be buying, but things will come around one way or another.
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Try your best to keep at least a 3 point spread between cap rate and interest rate.
I’m also seeing that park owners are asking drunk prices still.
Prices should start coming down over next few months once sellers realize the party is over.
Almost every deal I look at the numbers don’t work because of ridiculous asking prices…5,6, 7 cap asking price on deals that are far from worth that.
Our most recent interest rate locked in for an acquisition few weeks back was 8.8%.
Remember the golden rule: never overpay, you make money when (and how) you buy.
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Hi there,
We are seeing cap rates around 8-10% on smaller deals around $1 million- it depends on quality/location etc. Getting a 3 point spread is ideal, if you can find it. We typically have to add value years 1-2 to create that kind of spread though.
Feel free to reach out if you have any questions.
Good luck,
Andrew Keel
Keelteam.com
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