How much of a commercial loan approval is based on personal investment history?

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Hi Folks,

I’ve got high credit scores, about 20 years RE investing experience, and a solid history with my loans on SFRs, duplexes,etc. No missed payments, etc. I’d like to get into a park and borrow about 2/3rd of the purchase price.

The one thing that worries me is that the one park I do own had about a an 18 month rough patch that we are just now pulling out of. 2016 was pretty nutty. So many turnovers. Some of these folks perhaps were ticking time bombs from a previous time when screening criteria were lower, some were evidence of the opiate epidemic. I hate to make excuses, but I honestly don’t know what I would have done differently. I’ve got the same manager couple as the previous owner, same tenant pool,and the park did perform quite well for the first 9 months or so.

Anyway, the question is: if I try to buy another park, this time with a commercial loan, how interested in my current park’s performance/books will the lender be? Wondering if I just need to sit this one until I’ve got a couple solid, recent years in the rearview mirror.

Thanks!

-HPD

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It depends on the lender.

They all will like the fact that you have skin in the game.
All will consider your credit scores.

But a potential issue could be your relative lack of experience with commercial property.
That can be a Catch-22. How to get experience if no lender will give you a loan with which to get that experience.

I would not show my hand right up front. If you’ve made your loan payments on time, that’s as far as that conversation should go.

I would suggest a local lender. And preferably one who has experience with MHP’s.

If you find it impossible to get a loan from a commercial lender, your capital (1/3 down) should be more than enough for many sellers to provide the financing you’ll need to close the transaction.

Keep us posted,

Mike

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I agree with Mike’s comments plus you are already a park owner.

You have a down payment, equity and a performing asset. You’re their perfect client.

Congrats on being ready to do it all again.

To your success

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