RV park deal evaluation
Hey,
I have an agent helping me acquire a 38 space RV park with a 3/2/2 home in East Texas and I am doing so pre eval before walking the property. Asking $659,000, cap 13.5%. Private financing available: 50% down, 8.5% interest for 3 years.
Right now operating expenses are at 37% but that is with a low management expense and no lawn care.
The seller doesn't account for any repairs or cap ex. I see the owner has a new septic tank system - so that falls under cap ex. What is included in cap ex and repair on a trailer and rv park?
I understand parks traditionally cost less to maintain than apartments but 37% doesn't appear accurate. In my spreadsheet, I increased management to 11% of gross income and lawn care to 6% of gross income or $700 monthly. That increases operating expenses to 47% and 11% cap rate.
I am located in the DFW metroplex. Is there anyone with trailer park experience willing to provide some pointers? I can provide lunch and share my calculations. Help!