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Ventura Mobile Home Park Being Sold to Residents
December 29, 2009 by parkguy1 · Leave a Comment
If you are a California rent control mobile home park owner….take notice!!!!!
I just read this morning that a well maintained, 40 year old, 125 space rent control park is being sold to the park residents. This sale reportedly could bring in up to $200k per space! The park residents will have the option to either buy their space or continue renting, BUT, at increased rents (remember…this was a rent controlled park). The Ventura Planning Commission voted unanimously to allow this conversion earlier this month.
Lets run some numbers…The current space rent is reportedly $390 – $550 for a 125 space park. Lets, for the sake of analysis, say that all spaces are paying $550 and that expenses for the park are approx. 25%. This would give you an NOI for the park of approx. $618,750. Estimating a 6% CAP rate (generous for a rent control park), the value for the park in an ordinary sale might be approx. $10,312,500 or $82,500 per space (note: this is a guess, I have not visited the property, nor have I seen the income or expense figures for the park) . If the park is sold at $200k per space, the sale price would be $25MM. You do the math!
The state of California will give up to $2MM per park selling to the residents (to help residents purchase their site) and this assistance is given on a first come first serve basis and guess what, there is only $8MM total available for all of California. Hurry, man, hurry!
Congratulations to the park owner and the attorneys that put this deal together.
Read the article here.
