Posted by Philip on December 23, 2004 at 14:58:06:
but small.
I do not want to borrow the money for this size of project…even though I could, because my credit is fine and I am not leveraged very high in other projects.
I have access to investors money for bringing in repos or other used singlewides.
The park has 11 sites, 9 are mobile pads and 2 are very small and simple site built structures that were intended as apartment type rental units and have been rented as that in the past.
6 mobiles are in place, but 2 or 3 are vacant. The site built units are vacant. So, he is about 4-5 of 11 occupied. (35% - 45%)
The street is chip and seal that needs minor repair.
I do not know the age of any of the items in the park, yet.
I will have to find the length of ownership and financial situation on his side.
Just a little more info…I will get more as time allows.
Micro-Park, Chance for Better Money? - Posted by Philip
Posted by Philip on December 23, 2004 at 09:14:19:
A micro-park owner told me he wants help developing his park. He also wants to sell it because he is a huge commercial realtor and does not want to put the time into the park.
It has 11 pads, city water and electric and gas. Separate septics. Its location is ok. Its neighborhood is ok.
His price is very high as far as purchase price.
I wondered if there is any way to do better than just filling a few of his spaces.
Would this be a candidate for lease/option?
Sub rent some lots after placing homes?
Gain credit towards ownership for capital invested even though it is in the form of better homes?
What type of criteria does a person use to determine a fair lease price?
Can the option be a few k?
I REALLY need help on this general scenario.
I will post more concrete information as I gather it.
I want to keep my cash investment small and do leg work for the guy while doing Lonnie?s or rentals in this park.
He said it has been “signature property” for him, and I think he would like the lease payment because it would reduce his obligation even more.
He seems open to ideas so far.
Please weigh in all veteran Tin Can dudes! Doc, Tony, Karl, Missouri people, Joe from Arkansas, and any others.
Posted by Joe C. (AR) on December 23, 2004 at 10:55:31:
You’ve been very sketchy on details, both your financial position and park details. I think the master lease idea w/option is a good one. If you have the time to develop this park and he doesn’t, you may be able to come up with a win-win. If it was me, I’d be looking for a five year with an option to renew for another five. You pay all expenses (triple net) and something for him. To begin negotiations, you need accurate expense figures, taxes utilities, maint. etc. You don’t say how many homes are in place or if any are owned by the park owner, or if there is a mortgage which he’s paying on and how long he’s owned it. You need this info to come up with a lease figure that works for him. If you can come up with a figure close to what he nets now, and you can make a profit over and above that, as well as what you make on the homes you sell, you may have something. If he doesn’t go for that, maybe he will sell to you “on contract”, where he leaves the existing financing in place and essentially carries the financing for you. There are so many unknown details, it’s hard to give you a good answer.
Get as much info as you can as to what his financial position is with this property. Work out something on paper that you’d be comfortable with, and make him an offer. If it’s unacceptable to him, get a counter offer from him. Keep working it until you can agree on something or you know you can’t make a deal with him. If nothing else, the excersize will give you a better understanding of how to deal with this type situation next time you find a potential property.
A cheap education if you don’t buy, just ensure that it’s a cheap education even if you do buy.
Good luck, Merry Christmas
Joe C. (AR)