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Updated over 6 years ago on . Most recent reply

User Stats

121
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674
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Abraham Anderson
  • Investor
  • Sevierville, TN
674
Votes |
121
Posts

How would you price this park?

Abraham Anderson
  • Investor
  • Sevierville, TN
Posted

I'll have the option to buy the following park:

$300/month lot rent (All resident owned homes)
35 lots
city water/septic sewer
within 5 miles of a Walmart (tenants pay their rent there).
Located in a county of approx. 40K people

The previous owner dealt in all cash, there was no records at all. The current owner (a person who owns several parks that I am working with to turn this park around), paid all cash & plans to renovate/build up records over the next 6-8 months, then it'll be ready for bank financing.

How would you value the above park? What do you think would be a fair price/good deal?

Most Popular Reply

User Stats

74
Posts
26
Votes
Aman S.
  • Investor
  • South Riding, VA
26
Votes |
74
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Aman S.
  • Investor
  • South Riding, VA
Replied

Just a high-level estimate : 

Use actual rent. 

So if all lots are rented total yearly rent = 300*12*35=$126,000

Estimated expenses, let's say  35 % of gross rent $44,100

Net Income = $81900

at 10 Cap $819, 000  (Cap rate depends on the area, capital improvements required etc) 

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