How could this MH Park deal make sense? - Posted by J
Posted by J on July 30, 2007 at 13:28:52:
Here is a deal that I have run up on and can’t figure out. I’m wondering how the owner has come up with this valuation of the park. Here are the particulars:
$2,000,000.00 = 50 Spaces, Large Lots 60 - 100. 24 Acres, 14 rental trailers - 2 modular trailers. All equipment needed to run mobile home park. The park has its own sewer system and water system. Roads are black top, limestone. Of the 50 spaces, 8 are empty. The homes are not individually metered. The lot rent includes water and trash and starts at $200 for 2 occupants, $220 for three etc. Neither of the two modulars is rented, one is being used as an office and the other is under repair, finished soon. The one under repair sits on its own 8 acres across the street from the park with a tax assessed value of $85k. The tax assessed value of land and improvements of the park is $130k. The general condition of the rentals is decent, overall the park will not win any awards but is fairly well maintained. When I figure the land value, the lot rent and wholesale value of the 14 rentals I don’t get to anywhere near the asking price. The owner will not hold any paper. What am I missing here? I have a meeting set with the owner in a couple of days and want to have my ducks in a row. I welcome any questions or suggestions!