370 Star Ln, Sanford, NC — I Break This Down Fast (Income vs Price vs Structure)

370 Star Ln, Sanford, NC — I Break This Down Fast (Income vs Price vs Structure)

370 Star Ln, Sanford, NC — I Break This Down Fast (Income vs Price vs Structure)

Let me walk you through this clean and simple like I would in real time on a call.

Step 1 — Extract What Matters (Ignore the Fluff)

From the listing:

Price: $1,125,000
Units: 15 total
13 TOH (tenant-owned homes)
2 POH (park-owned homes)
Cap Rate: 5.33%
Step 2 — Reverse the Income (This is the truth test)

Cap rate tells us income.

Formula:

NOI = Price × Cap Rate

1,125,000 × 5.33% =
👉 ~$59,962 NOI (~$60K)

Step 3 — Quick Reality Check (My Instinct Test)

15 units → only ~$60K income?

👉 That’s $4,000 per unit per year

👉 That’s about $333/month per unit

🚨 That tells me immediately:

Either rents are low
Or expenses are high
Or both
Step 4 — Run Grant’s Math (Deal Factor Check)

Now I check value based on income:

Step 1:

NOI = $60,000

Step 2:

DSCR buffer
60,000 × 0.8 = 48,000

Step 3:

Deal factor (7%)

48,000 × 14 =
👉 ~$672,000 TRUE VALUE

🚨 THIS IS THE TRUTH
Asking price = $1.125M
Income value = ~$672K

👉 Overpriced by ~$450K

This Is Why Grant Said It’s Overpriced

Because:

👉 Price is not supported by income

Step 5 — Now I Run MY Model (85 / 45 / 24)

I don’t use their price.

I use true value ($672K)

Offer (85%)

672,000 × 85% = ~571,000

Recorded Price (45%)

672,000 × 45% = ~302,000

Lender (24%)

672,000 × 24% = ~161,000

Seller Legacy Payoff

571,000 − 161,000 =
👉 ~410,000

Step 6 — Now I Ask the Real Question

👉 “Why would the seller accept this?”

This is where the deal is made.

Clues from the listing:
Water billing not implemented
Expense inefficiencies
Mixed TOH / POH structure

👉 That means:

There is upside potential

Step 7 — If I Improve This (This Is Your Edge)

Let’s say you fix:

Add water billing
Raise lot rents
Clean expenses

Now NOI goes from:

👉 $60K → $90K

Re-run value:

90K × 0.8 × 14 =
👉 ~$1,008,000

🔥 NOW the deal makes sense

How I Explain This to the Broker (Clean)

“I’m tracking the income at about 60K, which supports a value closer to the 600–700 range. If there’s a clear path to push NOI into the 90K range, I can get more aggressive — but I need to see that upside clearly.”

👉 No arguing
👉 No emotion
👉 Just math

Final Breakdown (Keep This in Your Head)
Current value → ~672K
Asking → 1.125M
Gap → ~450K too high
My Decision

❌ At asking price → NO
✅ At structured entry + upside → YES