All Forum Posts by: Preston Long

Thanks for the reply, I was asking this question trying to understand the valuation for when I would complete the project for refi and potential profit. From other responses I have gotten outside of BP it sounds like NOI would normally be underwritten with the included expense of a onsite manager. Seems to me to makes sense. To be sold as investor grade property one would need a manager, no one wants to manage it daily.

Looking at an RV park in Mississippi. It's currently 15 lots and room to add Abt 25 more. I do not want to self manage this property, a manager at 40k/yr will be about a 30% expense to the noi after the value add project is stabilized. It is a project property and I would be there most of the days while turning it around. The only way it would work is if I managed it during that construction time. But I'm trying to forecast the financials further and looking at the valuation after I get it turned over. 

So my question is two fold. 

1.) How would the bank derive new valuation? Trying to recoup capital by refi, Could I be safe figuring backwards that if I could get dscr of 1.25 I would be close? accounting for manager expense or no expense bc I'd self manage

2.) if I were to try and flip it and forecast a sale price, do investors typically prefer a manager? Would that normally demand a higher sale price/cap rate based on investor appeal? Or would it be the same as a bank and I can figure the value based on new buyers 20% down, bank loan and 1.25 dscr?

This is my first time posting! Appreciate any help!