Has any had any success with any lenders on parks with all POH’s.
We have come across quite a few parks from 800k-2.5 mil that are good candidates to transition them to TOH parks but none have worked out. Currently we are interested in a 50 spot park around 1.6mil and have a substantial amount to put down, but still no luck. We have always tried for owner finance. Maybe a bridge/hard loan or something for 1-2 years if anyone has any recommendations or advice I would love to hear it.
Thanks all
Talk to Erich at Crown Capital. There are lenders out there, but you will probably have the best luck with a mortgage broker
How do the numbers work to switch from POH to TOH? Seems like you’d have to get the homes for free.
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My experience has been a broker will not come through on this. We paid several thousand to brokers in up front fees and appraisal fees only to end up disappointed and a little lighter. I would like to lose a few pounds but not from my bank account…
If you find otherwise and find a broker that can, let me know.
The ones that do a lot of parks will tell you up front no more than 30 to 35% POHs and they will base the value off actual Lot Rents or Market Lot Rents. If they don’t tell you this I would be very suspicious as to why they don’t know this to begin with.
A local bank, especially one you have accounts with is an option but the appraisal will likely be off Market Lot Rents and may appraise and may not.
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Jim, thank you very much, I reached out to Erich
I am not sure I understand your question. We would transition the home to a type of LTO or something similar while increasing lots rates for those in rent to LTO transition. This would reduce home repair costs, insurance rates and lower the cap rate-hence increasing the park value.
Where is the park located? If you don’t want to give that information, what is the population of the MSA? Never should anyone pay a broker up front money. I don’t earn money unless the deal funds.
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Pre 2007 traditional financing was easier with a simple business model and enough to put down. That is how I got mine pre 2007. Now from what I have seen it is nearly impossible. Seller wants dollars based on the income and financing on used mobile homes is near zero as depending on their age have zero value and are not considered real property. You have to have a talk with the sellers and help them understand that they probably have two choices- A) wait for a full cash purchase offer which won’t happen as it is bad investing and a poor leverage of dollars or B) do seller financing. At the end of the day I don’t think any savvy investor will tie up 1.6m on a POH park. Just my opinion…
We have one park that is 2/3 POHs and 1/3 TOHs. We are a little heavy on the POH homes and have been thinking of selling a few of them out on contract to get a better mix. It is just hard to give up the additional income from the rental lift.
We are direct lenders for parks of this size and focus on 1-3 year bridge loans. Feel free to email me at NoahMiller@GeltFinancial.com
I own a 52 pad park in Indiana I am thinking about selling. Almost all are TOH. Public water/sewer.
Tim (360) 223-0190
thanks Tim, Ill give you a call this weekend.
Dustin
3868464488
We never bought a property with 100% park owned, but have bought 50% park owned. From the post, it is not clear if you were having trouble getting the deal under contract or getting the financing. Most lenders will want to see a separation of income generated from the park versus the homes, and they will not finance the portion generated from the homes.
If you are offering on a property with 100% park owned homes, then it is conceivable that a large amount of value could be attributed to the homes. That means you will need to come up with minimum 25% cash for the down payment on the park plus additional cash for the homes. If you were simply offering 25% down payment on the whole deal, then you will be rejected by many banks.
You can pursue the seller financing routes, but my experience has been that sellers prefer cash. If you can increase your cash commitment, then you may have better luck getting a deal under contract.
The park is under contract. We have planned to put down %35 and a loan broker has told us he can find a lender, but I have heard that before lol. Home are FEMA cottages 2007/2008 and there is room to expand and place RV spots.
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