I read Fred Balke’s entire blog on his experience thus far with his turnaround park. One of the many things that is obvious is the large amount of captial (which he mentions can be in the $1-1.5M on a park his size) spent on buying and rehabbing homes to sell and fill up your park.
I have a 2-fold question:
1- Fred mentions his lease option deals when selling the homes to the new park tenants. Is this better for some reason than a straight contract where you are carrying the paper? If so why?
2 - If you did sell them on contracts (if you didnt have access to that amount of capital) would a note buyer consider buying those contracts so you can free up that capital and go right into another home to rehab and sell? Would the note buyer want a certain amount of seasoning on the loans?
I am sure someone has thought of this idea before which I would think would help fill up the park faster. You would lose income from the contract sales but I would think filling up the park faster would be more desirable.
Any comments? Thx