Hi, I have been having a difficult time finding a lender for a park near Atlanta. It is my first park purchase and owners do not want to owner finance. I have spoken with the suggested lenders from the MHU bootcamp, various other local and regional banks and a loan broker. Overall the lenders all said they do not like parks with too many POH’s, one lender mentioned park was class D on top of too many POH’s, and a couple other lenders said they prefer 1 million or larger loan size.
Now I have begun to think I might make more progress on parks that are well above the 1-mil threshold. I am also willing to partner up with others etc. I would love to chat with anyone about ideas or opportunities.
Thanks
Dustin
386-846-4388
My Background
I am a single family guy that is selling off my houses in the Atlanta area. I have remotely managed airline crashpads in Detroit that have housed 100’s of tenants. I am planning on moving overseas next year. Day job is a commercial airline pilot that I am not so enthusiastic about.
Over 30 years in the park business doing both MHP’s and RV parks and combination of both. We have a long list of people wanting RV spaces for their newer to new rigs but no interest in mobile home spaces available for tenants homes to be brought in. 25 years years ago our mobile home spaces were filled by tenants bringing in homes not park owners trying to sell homes with their tied up money and than sell. Our parks have no POH. We are witnessing a dynamic change in the park business. New RV parks are being filled in most cases in less than 2 years with tenant owned rigs or tiny homes that are generally EASY to move. We have ceased to buy MHP and mostly into thriving RV parks–if a nice MHP is available without POH we will consider. When selling parks with lots of POH the possible buyers are greatly diminished–almost like operating a Motel 6!!
Maybe talk to the owner and let him know your difficulty in finding a loan. See if they know anyone that could help. Maybe if you can’t get financing, ask the owner if he will owner finance for a year or two, sell off all the POHs to the tenants and then refinance the park, paying the original owner off.
I am also running into a lending problem.
I have a deal tied up in escrow for a client. We are getting quoted a 55% LTV, 3 Points, 5%. It’s a 800K deal.
My guess is the local small lenders are still worried about the Covid and are not willing to lend.
The big lenders will not touch a sub $1.0MM deal.
Fannie Mae is loaning on MHP’s, but deals are easier with loans for over 6 million–presently have a buyer using them with 3% with 10-15 years locked in–according to the information from buyer
In 2016 I think I called a list of over 40 local and regional banks within a 2 hour radius to finance a $750,000 deal. If I remember correctly 2 of them were interested when all said and done. 30% down, 4.5%, 5 year balloon and 50k in a cap ex account for road replacement.
I’m going to take a contrarian view here. I view this in a similar light to my brother-in-law asking me to co-sign a car loan for him.
Banks are big institutions with access to boatloads of data — data like which borrowers are more likely to pay their loans in time and in full and which aren’t. If a bank in unwilling to loan money to my brother-in-law without a co-signer … maybe he’s not a good risk. Maybe (almost certainly) I’m gonna find myself on the hook to pay off my brother-in-law’s car, and Thanksgiving dinners are gonna be forever awkward in our family.
In the same way, if a multiple lending institutions are unwilling to loan 30% on this deal … maybe it’s not a good deal. Maybe the deal isn’t well configured. Maybe the numbers don’t support the terms. So maybe you should take another hard look at the deal.
Now, current lending conditions are anything but typical. You may be caught by the COVID squeeze and things may loosen up in a few months. But you might take this opportunity to look at your numbers again.
I didn’t realize you had $500-600k in cash. It seems you’d be better going for a bigger deal that would get you better returns on your capital. If you’re interested, I’m in Charleston, SC and might be able to find something for you over here. Shoot me an email at tksolutionssc@gmail.com. But yeah, make that leverage work for you. Hahaha