MHP Purchase options

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1

Does anyone have any experiential thoughts on paying cash for a MHP, and using the equity in it to finance a larger park? The seller has oscillated on owner financing, my number one choice, (though it’s not a totally dead option yet). Another option is bank financing, which I’m pretty sure is doable, but may present a hazard to my ability to get the larger park financed if the same bank doesn’t want to do the second park. So I’m thinking of a conduit loan when I lock down the larger park, by rolling both parks into the one loan and using the equity in the first park for the 25% required for the total loan.

Thanks, Michael

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MWC,

Hope I’m not too late to the party.

Be careful with conduit loans. Some have onerous terms. And it may be difficult / impossible to get one property released if you choose to sell one and not the other.

You might secure the first park with additional collateral (another property your either own or will acquire). That may help the seller feel more secure.

More collateral = more safety for the note holder. Remember to work in release clauses after you’ve established a track record with that seller.

If you have some real numbers, this will make constructing offers cleaner.

Mike

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