Sellers often run personal expenses through the business.
These are called add-backs, and they matter because they increase NOI.
Common add-backs:
- Owner salary (if not needed)
- Personal travel
- Personal vehicles
- Cell phones
- Family labor
- Depreciation
- Interest
- One-time repairs
- Insurance anomalies
- Utilities unrelated to park operations
Why this matters to buyers:
Add-backs can make a park look weaker or stronger than it really is.
Your consultant will help you understand which add-backs are legitimate.
