All Forum Posts by: Reese Phillips

@Reese Phillips

It sounds like you are making a mistake of capping the home income. 55k sounds like the gross income including the rentals right? 

How you value a park is the lot rent ( I'm not sure what it is there ) lets just say 250 x9 (occupied lots) 

=2,250 a month x 12 = 27k annual gross income* estimated 50% expense ratio ( smaller parks run higher numbers and you can get a better grasp using your actual numbers) leaving about 13,500 in net income.  Say you 10 cap that ( might be higher, might be lower as i don't know that market) possibly giving the park a value of 135k. You would then add back in the value of the homes ( from what it sounds like in your description about 0.  But even 1k per home and then you are at 10k for the homes plus 135k for the park for a total price of 145k. In that scenario , you are potentially overpaying by the park by more than double the value. 

I made a lot of assumptions there so you need to get this figured out ASAP.  Find out the local lot rents in your market.  If they are 450 a month, that can change things. 

We also don't know what kind of shape the park is in, do roads need work etc? Trees , any utility work needed ?

This goes for any deal for anyone, NEVER cap the home income. That is the fastest way to overpay. 

Let us know how the rest of the story plays out. 

Lot rents in the Boise area go from $450 - $550. The homes with the lots average 575 right now. I am planning on selling the homes to the park tenants and making the lot rents a flat 450 across the board. And then carrying the notes for the difference until the own the trailers. 

@Reese Phillips

You said 9 occupied lots out of 10 spots but then said the park owns all 10 homes.  Did you mean the park pays all 9 homes? 

That is good that you are on city utilities. Who is currently paying the cost for them? 

Are the homes straight rentals, how old are they, what kind of shape, length of tenancy  ?

You said it is a legally operating park.  What is your basis of this  ? Did you get any documentation in writing from the city to describe the status of the park? 

Deal numbers are what your income/expenses/ price for the park are.  If you will share, this can give an idea if you are getting a great price, an ok deal, a terrible deal that you should stay away from etc.  

Also is it cash, seller carry, bank financing? 

Have you done a Phase 1 survey ? 

 How many occupied lots , are you getting any homes , what kind of sewer , what kind of water supply ? 

Have you verified that this is a legally operating park ? 

Please share the deal numbers if you are wondering about the merit of the deal. 

Ask any specific questions you have concerns about. 

 How many occupied lots , are you getting any homes , what kind of sewer , what kind of water supply ? 

Have you verified that this is a legally operating park ? 

Please share the deal numbers if you are wondering about the merit of the deal. 

Ask any specific questions you have concerns about. 

We're all here to help - what's your question?