Posted by Don Dion on July 27, 2005 at 13:11:17:
GRM is a rule of thumb for residential 1 to 4 units and not generaly used for commercial.
Cap rates vary by area the national avg for MHP is 10%.
As rates rise your Debt Service will decline using the same NOI and may require more down for the same loan program / amort.
Inflation, Interest Rates, and MHP Values - Posted by Robb
Posted by Robb on July 27, 2005 at 10:19:40:
MHP valuation seems to have a pretty strong relationship to the financials surrounding the business. What happens to the valuation when we experience increases in inflation and/or increases in interest rates? Is there a relationship? How does it affect the GRM and Cap Rates? Is it a linear relationship? How do you take these factors into account in leveraging a deal in today’s market?