100k down payment on park?

[Daniel Warren]

my supervisor is owner of a mobile home park. I hit him up for some eyesores that he would let go cheap to get fixed up and turn into lot rent for him. He ended up offering me the park if I was interested. He bought it as a retirement plan and he is getting ready to start retiring. All these numbers are approximate as we have not had any formal offers, just casual conversation on the subject. He said he would want 100k down and he would owner finance the rest. The rest being somewhere close to a million. There is about 75 lots with about 35 active and he owns about 14 trailers for rentals in the park. I think its about 17 acres of highway frontage and lot rents about 100/month and rentals are 350-450. Good deal? Pass? I also cant touch the 100k down payment, finance it?

Any advice welcome, thanks ahead!

[Bryan H.]

Pass! Even if you get the $100k the revenue won't cover the payments. $900k @5% over 30 years is $4800. Lot rents are getting you $3500. It's not even close to break even with favorable finance terms. The guy wants to retire off of you, not the park. As said before, the park may be worth the $250k range.

Look up Dave & Franks formula to ballpark the value of a park. Lot rent x occupied lots x 12 month X .6 for expenses x 10 cap rate.