Posted by ray@lcorn on November 14, 2000 at 09:07:22:
Multiple offers work to uncover motivation. If the owner wants cash, wants out, and wants both fast, then a multiple offer of say $18T with terms coupled with a cash offer of $13T may be the wake up call she needs to move off the asking price. Whether she would care about an explanation of the current negative cash flow is a function of her motivation. If she isn’t motivated, knows the value of the dirt, and is willing to wait, then your offers won’t be accepted. In that case, start raising the cash offer in increments of $500. To tell you the truth, if it is a deal at $15T, it’s probably still a deal at $16T, or $17T…
Like an auctioneer friend of mine says when bidding stalls… how do you know?.. how do you know that it’s worth 15 and not 16? Answer? You don’t. This is a property you’re buying on the “come”. It’s not valued on its income, but rather on the cost of replacement. From the info you have shared, it seems that it would cost more to build this park than to buy it. But be careful you don’t put yourself in a bind… the negative cash flow will have to be funded, so put some time into thinking about how much negative it will be and for how long. Plan your work, and work your plan.