The best advice I can give you is to work with the numbers on the park! Using some crazy formula that is derived from “?” X Gross sales gives you a number that most times no party is happy with:
- Not the seller
- Not the buyer
- Not the appraiser
- And DEFINITELY Not the bank!
My view is to always take the parks Schedule C (tax return) or P&L if trusted, and run it through a NET OPERATING INCOME matrix that will analyze the income and debt to come up with a true formula for cost.
Other factors that should be considered:
Non-recurring expenses for capital improvements (such as bathroom remodel, or pavilion addition, or roof repair) – these items will not repeat and should not be considered as part of the normal expense category.
Also, adding income generators like cabins – these should not be part of the expense, but rather should be quantified so that you can see the impact to the gross sales line.
I have a spreadsheet that I give to all my clients that does all the work for you! Call me now for details!