Posted by Bob Thatcher on November 17, 2000 at 24:39:39:
You could Profit from this Short Story…
We are prepared to sell and subsequently assign our Option to Purchase an excellent (41) pad MHP in North East Indiana. My market analysis indicates a Very strong & stable Market. All due diligence is also very favorable. Park is in city limits w/municipal utilities paid by tenants. Historically, this park has little to know vacancy. Sellers are interested in maintaining management assignment after sale “Turn Key” Opportunity!
While shopping for a 1031 Tax Exchange with proceeds from a proposed land sale of a family farm, I discovered this park in March, 2000. My research indicated that monthly pad rents of $165/mo. were well below market. I structured an Option to Purchase Agreement at $630,000 (Sellers were asking $750,000)which included a covenant by the Seller that they would raise the monthly lot rent to $195/mo not later than June 1, 2000. This was accomplished and no tenants have left because “market rents” are at $200/mo.
Calculations: $195-$165=$30.00/Pad/Month X 41 Pads Yields $1,230/Month or $14,760 per Annum directly to NOI Line! Presuming a .10% Cap Rate yields added (income approach)market value of $147,600 or $777,600 estimated market value. This is based on the Income Approach. (Before we even have to Close!)
Bottom Line: Our Family Farm Sale was also an Option. It has to date not been excersised and has just expired perhaps to never be sold & closed. Accordingly, we are unsure if we will excersise our option and proceed with our acquisition of the Park even though it is such a fabulous opportunity! Positive cash flow even with a high LTV Ratio.(Frankly, we are saddened by our not being able to complete this aqcuisition as planned)
Is This Opportunity Right For You?
Purchase our “Exclusive Option” to buy this prime park for $45,000 (OBO). You will receive the Assignment of the Option giving you the ability to purchase this park with an estimated market value of $775,000 plus for $630,000. You Net an estimated $100K in Equity the Day You Close!
The Option Provides for The Sellers To carry back $100,000 @ 9.5% Interest, Twenty (20) year Ammortization period, Balloon in Year three (3) Monthly PMT $855/Mo.
In addition to Cash, We would consider quality Note(S) as consideration for our Assignment of the Option!
3)The Option To Purchase must be excersised not later than December 31, 2000. Final Closing Must be consumated not more than (45) days thereafter or January 15, 2001. Can You Act This Quickly?
4)Please respond immediately by e-mail to learn more about this UNIQUE RE Acquisition Opportunity. You will be delighted with the quality of this park and the detail in both the market and financial due diligence that I have prepared. Spread Sheets to Qualified Purchasers! Principals Only Please…
Thank You for Your Time & Consideration.
RL Thatcher, CSM
Be Advised: RL Thatcher is a licensed real estate broker in Indiana. With respect to this proposed transaction he is working solely in his own interest and that of his family. All information delineated herein is believed accurate. However, it is subject to revision and thus, is not warranted. As with any commercial real estate transaction, Potential Investors are incouraged to conduct thier own due diligence and seek legal representation.