๐๏ธ RV PARK DEAL BREAKDOWN โ REAL NUMBERS Actual numbers. No fluff. No pro forma.
What is a Cap Rate? A cap rate tells you what return you're getting on a property based on its actual income. A 10% cap rate means: take the NOI, multiply by 10 โ that's your offer price. What is NOI? Net Operating Income. Revenue minus expenses. The number that actually matters. ================================================== ๐
2021 Gross Revenue | Actual Expenses | Actual NOI $144,392......... | $55,513.............. | $88,879 Expense Ratio: 38.4% Offer @ 10% Cap (Actual): $888,790 Offer @ 10% Cap (Pro Forma 35%): $938,550 Gap: $49,760 โ
What Does This Mean? This was the healthiest year. Expenses were close to the 35% benchmark investors like to see โ only slightly over. The park was running pretty clean. This is the number the seller will probably try to point back to. At a 10% cap, the real numbers support an offer around $889K. ================================================== ๐
2022 Gross Revenue | Actual Expenses | Actual NOI $154,440......... | $70,345.............. | $84,095 Expense Ratio: 45.6% Offer @ 10% Cap (Actual): $840,950 Offer @ 10% Cap (Pro Forma 35%): $1,003,860 Gap: $162,910 โ ๏ธ What Does This Mean? Revenue went up โ that's good. But expenses jumped hard. Even though the park made more money, it kept less of it. The gap between the real numbers ($841K) and a pro forma pitch ($1M+) is $163K. Expenses are moving in the wrong direction. ================================================== ๐
2023 Gross Revenue | Actual Expenses | Actual NOI $168,204......... | $99,425.............. | $68,779 Expense Ratio: 59.1% Offer @ 10% Cap (Actual): $687,790 Offer @ 10% Cap (Pro Forma 35%): $1,093,330 Gap: $405,540 ๐ฉ What Does This Mean? Best revenue year in the stack โ but expenses nearly ate all of it. NOI actually went DOWN from 2022 even though the park brought in more money. The operation got more expensive faster than it got more profitable. The pro forma gap ballooned to $405K. Something drove costs way up this year โ heavy maintenance, subcontractors, something. You need to know what before writing any offer.