What Is Your Park Really Worth? Here's How a Buyer Does the Math.

Why Valuation Is Where Deals Live or Die

Most deals that fall apart do so because the seller's number and the buyer's number were built from different ingredients. The seller is pricing memories, effort, and potential. The buyer is pricing proven income, condition, and risk. When those two meet without preparation, the conversation turns into a fight.

When you understand the buyer's math, you can do three things:

1. Set an asking price you can defend.
2. Fix the issues that cost you the most before a buyer finds them.
3. Use structure, like seller financing, to bridge a gap instead of cutting price.

How the Math Works

Step 1: Net operating income (NOI)

NOI is your income minus normal operating expenses, before any loan payments, depreciation, or income taxes. Buyers build NOI from your T-12 and tax returns, then "normalize" it:

• They add costs you are not paying but a new owner will, like management and labor if you work for free.
• They use full utility costs if you have been absorbing them.
• They take out one-time items, both good and bad.
• They may remove personal expenses you can document.

If your books show very low expenses, expect a lender to rebuild them. In our own underwriting, we start from a 55% operating expense baseline (Newmark/MMCG standard) when books look too thin.

Step 2: Cap rate

The cap rate is the return a buyer expects on the price. Value equals NOI divided by the cap rate. A higher cap rate means a lower price for the same income. Cap rates move with the market, location, park condition, mix of nightly and monthly guests, and interest rates. There is no official number. Your advisors and recent comparable sales are the place to look.

Illustration only, not a quote:

• NOI of $200,000 at an 8.5% cap rate: $200,000 ÷ 0.085 ≈ $2.35M
• Same NOI at a 9% cap rate: $200,000 ÷ 0.09 = about $2.22 million
• Same NOI at a 10% cap rate: $200,000 ÷ 0.10 = $2.0 million

One percentage point can move the price by hundreds of thousands of dollars. That is why condition and risk matter so much: they push a buyer's cap rate up.

Step 3: Subtract the known repairs

Buyers then subtract the capital needed to make the park work: septic, electrical, water, roads. If they do not know the cost, they assume a high one. Written bids keep that number honest.

Step 4: Value what is legal and in place

Pads you plan to build, sites you "could" rent, and units beyond what your permits allow usually get little or no value. Buyers pay for the machine you have.

What to Check, Fix, and Document

1. Build your own honest NOI

Start from your T-12. Add realistic management, labor, insurance, and reserves. Use full utility costs. Write down what you added and why. Now you know roughly what a buyer will see.

2. Run it at a few cap rates

Try your NOI at several cap rates, like the illustration above. Talk to your advisors about what range fits your area and condition. If the result is far from your number, that tells you where the work is.

3. Find the cheapest dollars to recover

Often the fastest way to raise value is not a new amenity. It is recovering utilities you are paying for, capturing bookings you are losing after hours, or fixing a repair item that is scaring buyers into a higher cap rate.

4. Get bids for the big items

For septic, electrical, water, and roads, get written bids from licensed pros. A known number nearly always beats an imagined one.

5. Separate "in place" from "upside"

Show buyers your in-place NOI first. List upside on a separate page, honestly labeled. Buyers respect owners who do not mix the two.

6. Think about structure, not just price

If the buyer's number is lower than you need, seller financing or a hybrid deal may help bridge the gap while giving you income over time. See our page on seller financing and closing.

Get-Ready-for-Sale Checklist

• T-12 and three years of tax returns ready
• Your own normalized NOI calculated, with every adjustment written down
• NOI run at several illustrative cap rates
• Recent comparable sales gathered with your advisors
• Written bids for known repairs
• Legal site count confirmed against permits
• In-place income and upside on separate pages
• Debt payoff and any prepayment penalty known
• Your own minimum net number, after taxes, discussed with your CPA

Common Mistakes

• Pricing on potential. Buyers pay for what is there now.
• Ignoring the expense rebuild. Your profit on paper is not their NOI.
• Using a neighbor's sale as your comp without matching condition and income.
• Leaving repairs unpriced. Unknowns get priced at worst case.
• Fixing the wrong things first. A new sign rarely moves value like utility recovery or a septic plan.
• Refusing to talk structure. Sometimes terms bridge a gap that price cannot.

An Example