I am in southern WI and one of the parks that I work in has come up for sale. I have met the owners and they would like to see my wife and I buy their park and are willing to do some creative financing to help us out. They have it listed with a broker for 1.3M but listed us as protected prospects because we met with them before they put it up for sale. Our price would be 1.2M. They want 300K down and would finance the rest at 5.5% amortized over 30 years with an option to review the rate at 5 yrs and 10 yrs, capping any increase at 2%. The park specifics from the 2008 P/L statement they sent me are as follows:
54 lots - 3 vacant
- 2 bedroom house for the park manager
Lot rent - $257.00 - this is $25.00 - $70.00 less than the 4 other parks in town.
Water - paid by park - total cost for 2008 = $15,000.00. I would sub-meter this and bill back the tenants in the future.
Utilities - $1164.00
Telephone - $2665.00
Office Supplies - $850.00
Maint/repair expense- $5,500.00
Insurance - $4300.00
Property tax - $13,200.00
Mobile Home tax - $3275.00 - this is recouped in the lot rent
There is a part-time on site manager who does maintenance, mowing and snow plowing. They live in the house at no charge and the park owner issues them a 1099 at the end of the year equivelant to the rent charges ($6,600.00 last year). Any extra work (tore down an abandoned home last year) are shown as a bonus under office suplies. The operating expense ratio is 28% according to the P/L statement.
The owners first told us this was for sale 6 weeks ago but I didn’t seriously consider it because of the sale price. Now we are getting to the last 2 weeks of our “protected period” and things have taken a turn. We have spoke an couple times in the interim and they have been very flexible with the financing and have really pushed that they will get creative with the financing, second mortgage on our house, etc. Now I’m frantically searching for ways to come up with the down payment, I’m about $200,00 short and am interested in your thoughts. The numbers I come up with have this valued a little high but if others out there think this is a good possibility I will keep working on it. If not, I would be interested in why you think not and what it would take to make this a good deal. Email or phone calls are welcome - cell phone 608-931-4593.