Iâ€™m currently speaking with a park owner about purchasing his park. He is an older gentleman who needs to sell for health reasons. Here are a few things about the park:
54 POH (4 vacancies)
22 Vacant lots developed and ready for homes. (Rents to be $650 per month) Would like to fill these with in 2 years. $650 x 22 x 12= $171,600 in annual revenue.
Current homes range from mid 1960â€™s â€“ 1980â€™s with a handful of 90â€™s and up. Mostly all homes have been renovated. Owner has put a lot back into the park the last few years.
City population 30,000+ (10-15 miles from big city)
Newer gas mains, service mains, electrical underground type pedestals, and bringing of all trailers up to current codes. Individual meters on each lot for gas and electric (tenant pays). Electric pedestals are installed on all lots, with electric lines going to Mobile Homes underground for improved esthetics. Aerated sewage lagoon located on SE corner of property treats sewage. EPA permit Approved. Currently excellent results showing that the number of mobile homes could be increased to 100+ units. No large sewage bills â€“ essentially operates at a cost of less than $5,200. per year including testing. Sewage mains run down each street and across the back part of the property. City water. A backup water supply comprised of 4 large wells, 24â€™ x 24â€™ well house/storage, magnesium permanganate filter, chlorinator, and storage tanks is available.
Owner asking $1.5m
Last 4 years Average NOI is $161,990.
As of now he has agreed to finance the park with $110k down @6.5% he would like a $7,000 monthly payment. We have not discussed the length of the deal but I would like a minimum of 10 years.
Any thoughts or suggestions greatly appreciated.