Hey everyone. I am looking into buying a trailer park with 6 trailers. One is rented and 3 need small repairs, mainly cosmetic work. 1 is a money pit to much to do in it I think. just looking for some resources on how to analyze this type of deal.
Have you thought of doing an appraisal on the entire site? To help you understand how much it is actually worth.
There are more cost effective valuation techniques to use to judge the market value of the property. You can look into BPOs or AVMs.
Appraisal Management Companies usually take care of this. They are the firewall between lenders and appraisers to make sure everyone is compliant with federal and state regulations.
I think I'd look at it from the income perspective. Determine how much annual income the trailers will produce and use the 1% - 2% rule. I'd also discount the price because you will have to replace the junky trailer.
Trailer "park" is a strong word for 6 trailers. It sounds like the park comes with all the homes? Ideally your tenants own the homes and you rent the land. There isn't nearly enough info provided to make a guess but for a small park you'd want at least buy at least at a 10 CAP though probably 12+ to be honest. That would, of course, be based on the income (what's the lot rent) and expenses (what's going on with utilities, are there city services etc.) And that's barely scratching the surface of what you need to know to come up with a CAP and know if the deal is even worth pursuing.
Google Frank Rolfe and Dave Reynolds. Their info is priceless.
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