Determining Offer on MHP

[Bryan H.]

I'm looking at purchasing a MHP, asking price is $220,000 with CAP rate = 12%. With 25% down and after expenses my ROI is about 21%.

I'm pretty sure the seller determined the price by starting with the CAP rate to get to $220,000.

Another way Frank Rolfe suggests is:
Rents x 12 x 70 = Purchase price. So $2850 x 12 x 70 = $192,500

Sitting in my local REIA meeting yesterday, the speaker said properties in the area are selling on average 5% less than tax values.
Tax value on this property is $187,000 - 5% = $177,650

How would you go about determining an offer price?