Closing Costs

mobile home university
1

Hi Everyone

I’m relatively new to RE investing, I have a couple SFH and now looking at my first MHP. It’s a smaller park, 12 spaces on 2.5 acres, they are asking $220k.

I’m familiar with SFH closings, but not commercial loans. What can I plan on for closing costs on a park like this?

Thanks in advance.

2

$1,000 for a Phase 1 Environmental Study

$2,500 for an appraisal

$??? points charged by your bank

3

I was budgeting 5k to have for closing, so with taxes and insurance it looks like I was close. Thanks

4

I’d budget closer to $10,000, so you’ll be happy if you have a little left over to buy yourself a beer after closing.

5

joshM Wrote:

I’d budget closer to $10,000, so you’ll be happy

if you have a little left over to buy yourself a

beer after closing.

Since I don’t drink beer, :)-D. is there any other reason I should budget 10k? What other closing costs would drive up the budget like that?

6

I always buy myself a bottle of Port made in the year the park was constructed (or nearest declared vintage).

And yes, I do invite friends over to help me celebrate - I don’t drink the bottle all myself. ; )

-jl-

7

Don’t forget

attorney’s fees – you may (will?) end up paying the bank’s attorney out of the closing costs.

surveyor’s fees – the bank will probably require a survey.

title company fees – they will probably research the local civic and county ordinances, etc., and this takes time.

your own lawyer’s fees (recommended!)

your accountant’s fees (you will want to properly set the basis for all your depreciable assets – see recent discussions on this forum).

plus all your prepaids (insurance escrow, tax escrow).

8

Brandon@Sandell Wrote:

Don’t forget

attorney’s fees – you may (will?) end up paying

the bank’s attorney out of the closing costs.

surveyor’s fees – the bank will probably require

a survey.

title company fees – they will probably research

the local civic and county ordinances, etc., and

this takes time.

your own lawyer’s fees (recommended!)

your accountant’s fees (you will want to properly

set the basis for all your depreciable assets –

see recent discussions on this forum).

plus all your prepaids (insurance escrow, tax

escrow).

So, could you provide a ball park figure to expect? Is 5k enough? 10k?

9

What do you guys think an appraisal for a 70 lot park on 8 acres would roughly cost?

10

We just had an appraisal done for about $3500 – this was a larger park but I don’t know that the size makes much of a difference.

Brandon@Sandell

11

$3,000.

-jl-

12

$1000 for a Phase I Environmental Study is probably too low, believe it or not.

Make sure the company has Errors and Omissions insurance and is reputable, as there are some fly-by-night players in that business.

Common costs for Phase I are typically between $1500 - $2200 depending on what part of the country the park is in.