I have one more step to get city approval for a new development park. Around 70 homes, w/ clubhouse, playground, and gated community. I’m projecting lot rent at $450-$500/month. Preferably all new homes coming in. I Spoke w/ 21st Mortgage today and they told me about their “CASH” program. You can only sell the houses for 10% over cost, that don’t bug me. They also said I’m required to repurchase the home if the buyer defaults. That makes me a little nervous. I’m looking for feedback on if I’m over reacting. If you have used this program can I get some feedback? TIA
You can ask 21st about their default rate. It is pretty low and if you do have to take a home then you can immediately resell it and 21st or someone else can carry the note.
The CASH program is a colonoscopy to get set up with but the program isn’t bad. They front the cash for you to buy the home and set it but there’s an implied interest rate on the money that reduces your profit over six months. If you don’t sell the home within six months, you’ll be selling it at cost.
If you’re on the east coast, call Park Lane Finance and ask about their GROW program. They don’t front the cash for you to set the unit up, but WAY easier to get set up with them. Since you don’t have a stream of income for the park, you’ll be personally assuming the recourse on the homes until the park is generating enough income to be the guarantor.
As long as you’re getting 15% down or more, the customer’s will be pretty sticky and your default rate should stay low. We have a rent to own program and generally people that put <10% down don’t turn over.
We were told you will also stand as the cosigner for 3 years on the buyers loan. We were told 1-year to sell, but they were very vague with the interest until the home sells. We are working on the paperwork to try this to fill in some open lots in a few communities.