Any park owners/investors in WA?

[John Wang]

I'm in Seattle. I've been working on purchasing a park in WA for about 18 months now. I've done feasibility on a few deals now that ended up not being deals due to land-use permitting issues and dishonest financials from the sellers. The biggest issue is that people sell parks at 5-8 caps here instead of 10 caps so finding a deal involves picking up a park that requires some investment and work to get it up to a 10 cap with 1-2 years post purchase.

I'd love to meet some other owners/investors in WA to ping questions off of. Anybody in WA or the Northwest here on the forum?

[Chris Phillippi]

I'm in eastern Washington. There were some hot deals on parks a few years back when nobody was buying, but most of them have been picked up since then...I bought three of them myself (two as a package). Still, that doesn't mean you should give up, but you are going to have to create your own luck!

Here's what I look for in a park, and it might be quite different than what you imagine. In fact some of it is what other people stay away from, which is why I think I've had success finding parks.

1. High density trumps high space rent.

2. Needs some attention--getting rid of central dumpsters, cleaning up junk, and keeping after it makes a big difference in attitude and appearance.

3. Family park--This is because of the demographic I prefer (see #5)

4. High occupancy--I don't mind a few vacancies, but I would only pay for couple vacant spaces if I bought another park.

5. Multi-cultural--In my experience, most immigrants are hard-working people trying to make a better life for themselves. That's my kind of tenant!

6. Rents around $250 or $270--WA has a high minimum wage, so space rent near $300 within a year or two generates a lot of extra income and is reasonable in every corner of the state.

7. These parks tend to be harder to sell because of preconceived notions, so they tend to be priced lower, and sit on the market longer. I paid around $16,000 per space for the 102 spaces we bought. I think $20,000 per space is reasonable these days (since I'm the one that bought at $16,000! :) )

After three years in this business, our three parks have generated a net worth (according to our bank's appraiser) of $600,000 for us! I bought both on seller contracts, but the financials were so good I was able to refi last summer at a 10 year term, 15 year amortization, 4.58% interest with one adjustment at five years ( to 6.5% max--which is my old rate). At the end of the term I should be able to pay 43 spaces off completely, and then pay off the 59 space park within another five years.

So don't give up! Hmmm...maybe I shouldn't have given away my secret park formula, but I do have one ace in the hole...hablamos espanol! Look at it this way, would you mind learning Spanish if it meant you might get to retire ten years sooner?