Hi All,
I have a 60 pad park in Corpus Christi, which we want to refinance soon and pull some cash out of. So far we’ve billed back water/sewer/trash, installed new fencing at the entrance, new sign, nice crape myrtle trees at the entrance, 4 new homes at the entrance, sealcoated all the asphalt, 4 new asphalt parking pads for the new home lots. The park looks a lot nicer, but the rest of the parking pads in the park are all in bad disrepair. I got a great price to redo all of these pads for $850 per pad (scraping the top layer of ashpalt off and re-using the base, we did it once and it looks great). Its 43k for the whole park. Wondering if this will add more value than 43k to the appraisal (by the appraiser using a lower cap rate) when it is refinanced and if its worth it from a ROI stand point. Let me know what you think. Thanks!
-Aaron
The nicer the park the better loan you will receive.
See the attached file for a GREAT guide as to what lenders are looking for.
MHC Loan Eligibility Analysis.pdf (428.6 KB)
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If you’re refinancing with a local bank, I don’t think they would care much. The appraiser might assign you a slightly lower cap rate for doing it.
If your park is borderline on qualifying for Freddie/Fannie then the parking pads could put you over the finish line.
I would personally probably still do it just because it looks better and will help attract better residents.