@Account Closed Hi, I've begun listening to your podcasts. They are really excellent. Do you attribute any value to undeveloped land, or is the value only based on the lot rent. I am considering proceeding as follows. Lot rents are $200 in this area, there are 12 occupied homes. Taxes are $2500 per year. General liability insurance is $1600/year.
Gross rent: $28,800.
-Vacancy 10%: -2880
Effective Rent: $25920
-Management Fee: 10% -2592
-Property Taxes -2500
-Insurance -1600
Annual NOI $18,940
Cap 10
Purchase Price $189,400
I'm planning to allow the owner to maintain ownership of the homes and collect rent and pay me the lot rent of $200. There are several other red flags that you mention in your podcast (weekly rentals, in the county but close to good employers). Is that an appropriate evaluation and if I can get it for that price, would it be worth it. I plan to convert to monthly rentals, and either leave the homes with the seller, or buy them wholesale for $3000 each and sell them to the tenants. My value add would be running the park more efficiently using the methods you cover in the podcast.