1031 exchange and loan value

I’m looking to do a 1031 exchange of a SFH (appraised $680k) into a MHP.

To be conservative I can assume the house will sell for $650k. The current loan amount is $450k. So I have $200k equity in the house.

I was just wondering what value of a MHP I could purchase. Would lender go with the 20% LTV ratio with the new loan for the MHP?



Correct me if I’m wrong, but you’ll have to roll all of your equity into the purchase of a mhp. I’m not too familiar with 1031’s but I don’t believe you can use that equity for closing costs etc which will be around 1%, the appraisal which is around $4k, phase 1, etc. If not, you’ll need some cash and you’ll want some cash for reserves for the park. My answer to your question is: “It depends”. Lenders usually want a 25% down payment - so you’ll get a loan of 75% of the park’s appraised value; e.g.; a $1M loan will require a $250k down payment - an $800k loan will require a $200k down payment. Also, you could buy a park for $200k cash and a park up to $800k considering you are getting a loan (note you’ll have to have cash for the expenses I mentioned above if your getting a loan).

Closing costs, appraisal fees and environmental studies are considered as acquisition costs or basis. Funds held in an exchange account can be used for these costs.