Good Deal?: 12 CAP - 24 Space Park Purchase

[Swat Khan]

Would love BP MHP Pro feedback. After analyzing over 100 deals I found this one. 1. Do you believe this is a deal? 2. Is there anything I should look out for? 3. Should I add anything? 4. Are the terms OK? Until I increase lot rent in January 2014, I have $900 per month for expenses to work with. Story: I am purchasing a 24 spc park in a small family oriented town. I met with seller and he's sharp and has owned 7 parks. Looking to retire. Deal: 24 occupied spaces Asking: $365,000 Seller accepted $275,000 - $50,000 down, $2995 per month - CAP rate actual: 12.1% - CAP rate: 19.4% (12 months pro forma at $100 increase in space rent, $265/spc, 30% expense) - Terms: $225,000 Seller carry note 12 yr $2995 per month, 7 year 18% pre-pay penalty - Space rent: $165 - Market rent: $280 - Gross rent/month: $3960 - All tenant owned homes - Road: park, gravel - Water: city - Trash: city - Sewer: city Market Research: - Schools: A (great high schools and private schools) - Population: 5000 - Metro area population (1 hr) from 6MM metro - Test craigslist ad pulls 20-30 calls per week.