I am currently speaking with several banks about financing my park purchase. They all would like an appraisal done of course but how do I work it to where I am not paying for a separate appraisal for each bank. Will they all share the same appraisal?
Also, when I visited the park I noticed some of the vacant cement pads had cracks in them with weeds and grass growing in between. Is this ever a problem that needs repair before being allowed to move a home onto that vacant lot? If so, how bad does the cement pad have to be to trigger a repair?
Give multiple banks information (actual tax returns, leases, etc) about the deal. They’ll also need info from you as a borrower. You’re basically putting a deal package together. Shop that package to multiple banks and ask them for their best deal.
Next, go with bank with best terms.
The application will go through underwriting. You’ll get a loan commitment pending an appraisal…unless you’re rejected. Write the check for the appraisal amount, the appraisal hits where it needs to and on the financing end you are good.
If a bank wants an appraisal before they’ll give a loan commitment that is a bad sign and I wouldn’t waste my time with that bank.
No idea about pads. I’d contact local zoning/ordinance officer and see if you’ll need to rectify to get an operating permit for that space/
Use a MAI to do the appraisal. Their work tends to be universal and every bank should be happy with their work. Also, if they want to check the work, it is very easy to do with an MAI’s report. They final bank can have a review appraisal done by an MAI of their choosing.
Great question. I covered this topic recently in a podcast with Kevin Bupp and Charles Dehart. You can find it in the iTunes under “The Mobile Home Park Investing Podcast” Episode #26 covers appraisal related questions.
Most banks will not accept an appraisal done for another bank. While we as appraisers may be on the approved list for each of the banks you are shopping your loan to, it is not as simple as us just going back and changing the name to a new bank. Federal regulations (USPAP) require that doing an appraisal for a new lender is considered a new assignment, which will typically mean a new inspection as the “as is” date of value has now changed. This may sound extreme but it’s how the rules are written.
I am an MAI designated appraiser through the Appraisal Institute. By the time an appraiser get’s licensed and earns the MAI designation it’s about a 6 to 10 year process. The designation is widely recognized by lenders, attorneys, accountants, etc., and in fact some lenders require it for certain projects.
Typically the bank won’t order the appraisal until you have signed the loan commitment paperwork so in most cases you are already committed.