Looking at a trailer park deal, Looking for advice
I'm looking at a Trailer Park that looks to to be a good investment, first time looking at a commercial deal and I think it might be priced to high....but I'm not sure.
Property Facts:
$870,000 price
Currently ~$8700/month income (don't own trailers)
Their is room to increase plot fees and bring in $10,000/month
2015 income$111000 Expenses 47,000
$64000 annual gross,
(111000)* (.6 *40% expense load on income*)/(.12 cap rate) = MOST I SHOULD PAY is $590,000 which is based on a 12% cap rate....but the property is cash positive and doesn't have applicable comps in the right area's.
64000/870,000 = 7.4 Cap Rate currently
73000/870,000 = 8.4 Cap Rate potential in 1-2 years
Taxes once readjustment for the price will increase as well
I cover water sewer trash. No septic!!
Good acreage in a good area, I think the land will appreciate well.
I'm looking at financing options now, but want to see if any experienced investors could shed some light on my price concern.