Posted by Greg Meade on August 21, 2003 at 19:07:49:
NOI of 171k is key.Can they prove these figs? Revenue is easy…expenses can be tough. Will they show tax rets? if not to you a third party acct or lawyer? IMHO with a true NOI of 171k i would not want to pay over 1,068,750 so i could get 16% return on my money. There is upside potential (20% vacant) but that is not here and now and will cost$ to fill. You can vastly increase cash on cash by getting good terms on an owners contract but need to be careful there is still adequate cash flow after debt service. As you well know parks often sell here with 8-10 CAP rates. I can’t do that. Will he discount for all cash? Good Luck!
Posted by Dave Fl. on August 21, 2003 at 18:45:33:
Got a email from a person offering a 100 unit park. I had inquired previously about a different park he had for sale. That one is sold but he has this one. It’s 80 percent full, 1990’s and newer DW’s. 37 park owned, 43 lots rented. Lot rent is 140.00. Annual income is 272,000.00, NOI is 171,000.00. Park is new and on 49 acres, good location, paved streets, pool, tennis courts, v-ball, and can L/O for 70,000.00 or buy for 1.6 mil. Thats all I know so far, but based on this info, what do you guys think? Sounds to me like I should jump on it. At least tie it up and do DD.
Thanks, Dave Fl.
Posted by Joe C. (AR) on August 21, 2003 at 23:24:53:
If you’re going to jump on anything, do some due diligence and if all checks out go with the L/O. I’d go with 1 year leases renewable annualy for 5-10 years (get annual renewals for as long as you can).
You’ll know within the first year or two whether it’s a good deal or not.
If you could get 100% financing at 5% for 30 years (which you can’t), your annual debt service would be $103,000 yr. I’d never buy it, I’d take the gravy and if/when it becomes more liability than asset I’d just simply not renew.
I’d love to find that deal in my area, if the NOI is anywhere close to real.
Joe C. (AR)