Quick park evaluation

[Lawrence Duhon]

Hi, I randomly got In contact with someone willing to sell a park in Louisiana off of Facebook.

42 lots, 28 occupied l, 225 lot rent. 1 double wide lot rent 375, 4 rto units 875.

He’s asking 945k and saying it’s an 8% cap rate with 30% expenses. I haven’t seen the property yet but does this sound right?

[Frank Rolfe]

28 x $225 x 12 x .6 (no way the expenses are only 30% when you're this vacant) = $45,360. When this guy tells you that $945,000 for $45,360 is an 8% cap (the actual answer is a 4.8% cap) then he is not telling you the value based on actual real property income, but only what you would get if you add in personal property income WHICH YOU CAN'T.

So the bottom line is that no, this deal does not work at that price as far as I can tell,

And that was not even mentioning the market and 101 other variables that make a deal work or not.