21 Lot MHP Valuation

[Stryker Brown]

Hey guys! This is my first post on here but I have been analyzing deals consistently and learning for roughly the last year. I recently found an off-market deal in Southeast GA that I am currently in negotiations with and could potentially get a great deal.

The park is across the street from a brand new development where land sold for around $140k/acre which is an encouraging potential exit strategy. Currently it is only occupied on 8 pads (5 POH and 3 lot rent) and this has 13 vacant lots. Current lot rent is $325 but the market supports $350 pretty easily. The big plus is the the park is on city sewer and already sub-metered for water, I think. I know it will take some time and money to fill the vacancy (I estimate $130k conservatively and 12-18 months) but I wanted to see what you guys thought would be a good valuation.

Current valuation formula I’m using is 21 lots * $325/m*12*.6 (expenses) / .15 (I’m greedy and want a $15 cap. That would put the valuation at $350k - $100k in CapX needed to give me $250k for the purchase price I’m looking to get.

Other factors for potential exit is land sale as development continues ( the park is 5 acres). His concrete offer is $400k but I believe I have some leverage.

Am I looking at this right? What are some pitfalls to keep an eye out for? I’m going to pursue owner financing, so what terms should I request? Should I partner on a deal like this?