32% is a seller's number, and the two things missing from it are usually management and reserves. Put 5% of collections in for management even if you plan to self-manage, because your lender will and because your exit buyer will. Then reserve on private utilities, not on the pad count. A well with a submersible pump, pressure tank and controls is a $15k to $40k event depending on depth and whether you have to redrill; a shared drainfield replacement on 10 lots is commonly quoted in the tens of thousands and can run past $100k if the county forces a new engineered system. At 42 lots I'd carry $300 to $450 per lot per year against that, which alone moves you from 32% toward the low 40s. That is the honest range for the sector, and your deal isn't an outlier.
On water billing: submetering versus ratio billing and what you can charge as an administrative markup are set by state statute and sometimes by local ordinance, so get your state's rules in writing before you underwrite a dollar of pass-through. Physically, the bigger issue is line loss. Old galvanized or poly distribution lines in a park this age routinely lose 20% to 40%, and the day you submeter, residents start comparing their meter reads to the master and you find out. Budget the meters at roughly $250 to $400 per lot installed plus billing software.
The part that can kill the deal is the shared field. If it fails, several states and most counties won't permit replacement in kind, and the fallback is either an engineered system or a forced connection to municipal sewer if a main is within a certain distance. Ask the county health department in writing what they would permit today on that parcel. Agency and many bank lenders also discount or decline private water and sewer, so confirm your debt before you spend on the Phase I.
