Need help on financing ideas for two mobile home parks


#1

I just recently moved to the SC area and have been on the search for a mobile home park. I came across a motivated seller who has two parks he wants to sell. He orginally wanted $129,000 but after I talked to him for a bit I found out he really only owes around $96,000. (Which I am positive he would sell for this amount) He and his business partner have no time with other investments so he just wants to get rid of them. Each park has four park owned homes. Six are rented out at very low rents so there is much room for improvement. The homes are older, single wide homes. They are within a very nice housing community close to the downtown area so my idea is to fix them up and owner finance them. He said the homes can not be moved out of the park due to a grandfather clause in the city. My question is what should I do about the financing? Should I try and do a lease option with him or should I try to just get a traditional loan or would that be more difficult? Also what major items should I be looking at before purchasing? Thanks!

Post Edited (03-24-08 03:25)


#2

Most lenders have a minimum loan amount of $100,000. That would be after the down payment. If he is willing to sell the park for $96,000 then maybe he would be willing to owner finance it as well. Most lenders will only lend 75-80% LTV right now considering the shape that the market is in.

I hope this helps you!


#3

Thank you that is what I thought. Now my question is should I just ask what amount he wants down? Such as 10% etc? Then I would start taking over his payments? What about taxes etc? I just want to make sure I structure it properly.


#4

I personally wouldn’t feel comfortable doing any project that I couldn’t move and replace mobiles because the city has it out for me. The problem isn’t that you might not be able to make it cash flow, but your resell value as a mobile home park will be discounted and your hard work won’t get the payout it deserves. Keep looking, there are always more deals. Good luck!