All Forum Posts by: Sam Hales

Hi Wang.  I am also in California (Sacramento area).  Our firm owns one park in California but a number of other parks in Kansas, Florida and Alabama.  We are in the market for more.  You can PM me your phone number and we can jump on a brief conf call to review what you have found.  Hopefully I can help you in identifying a good deal.

Hi Adam. I have experience in both real estate (running PE funds for the past 10 years) and have been an angel investor in multiple tech companies here in California. The EBITDA multiples you are talking about are more applicable to service related businesses without many "real" assets. Real Estate generally trades at a CAP Rate (NOI/PurchasePrice). We own a couple of MHPs in Phenix City, AL and have looked at Alabama generally. I would expect a small park like you are describing to trade for something in the 8-10% CAP rate range. Interestingly, a 10 CAP on what you describe is almost identical value: about $340k ($103k business valuation / 3 = $34k in NOI). However, I would need to look at the expenses to see if that valuation is correct. I typically evaluate the expense ratios under current operation to what we achieve (30-40% expense ratio range). You are correct, you don't want to pay for upside (that's why you are buying it). Also, the valuation can shift based on other factors such as: 1) private vs public utilities 2) location [all sorts of factors here such as median home prices, population, job market, potential for redevelopment, etc] 3) size [larger parks provide better management scale and thus usually trade for a lower CAP]. It would be interesting if you can share the financial information you have received and we can start a dialogue on the forum for analyzing it. Good luck!