Located in Norton Shores MI, Bel Air Estates is located 1 mile from the Muskegon Shores of Lake Michigan, and near the Muskegon Golf Country Club. The park is situated conveniently with all neighborhood amenities and services close by.
The community has 116 mobile home lots, 85 tenant owned homes at $350 lot rent. Current occupancy is 73% offering a significant value-add opportunity. Market occupancy is around 95% and local rents are at or above $400.
Bel Air Estates is an established park, with some lots able to fit a park model home. Tenants are long standing with many family and retired couples. Strong collections history and easy to manage, with no significant “tenant issues”. The current owners live out of state, demonstrating its ease of operation. There is a significant opportunity to continue the infilling process bring the park up to 90% occupancy which would allow it to qualify for Agency Debt.
Bel Air Estates is on public utilities, sub-metered and billed back; the tenants are also charged for rubbish services. The park’s electric services are billed directly to the tenant.
The park is priced at $4,250,000. The pricing represents a day one cap rate of 5.95% using current lot rent income only on normalized actuals using a 35.9% expense ratio. This community qualifies for conventional recourse bank financing using a 65% LTV, 5% interest and a 30-year amortization with a 18 Interest Only period. This provides investors with 7.7% cash on cash return in year 1 & 8.76% in year 2. Then achieving a 16.5% cash on cash return when upside is completed. Pro-Forma value of the park is $6,523,798. We are asking that investors submit offers at or above $4,250,000.
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