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Updated almost 7 years ago on . Most recent reply
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Am I crazy - Need help analyzing a deal
After much research I am narrowing in on a few Mobile Home Parks and have started to make offers but the feedback I'm getting from the seller(s) makes me feel like I'm way off in my valuation.
Basics:
Lots: 60 (100% occupancy)
Lot rents: $375 (in-line with market)
POHs: 10 which I don't CAP but pay for separately
Exp ratio: 40%
All in offer: $1.85M
Crickets, crickets, crickets. I think they wanted to hear $2M but I'm not in this to break even and I don't think its prudent to put my formula in front of them to show them the analysis.
Would appreciate a realty check and any guidance going forward from the group.
Most Popular Reply
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My guess it's just a matter of cap rate. Looks like you're valuing it at around a 9 cap and they are probably looking at a 7.5-8 cap based on the fact that it's a completely stabilized community. Not sure what you would have to lose by having a conversation about how you're coming up with you number versus where they are coming up with theirs. Of course keep in mind I have yet to purchase a park so my opinion could be completely worthless!