Financing for Working Capital

Hi Everyone:

I own two mobile home parks, one with 175 lots and the other with 56 lots.
The last few years, I’ve been dealing with water breaks and loosing a significant amount of money on wasted water and sewer fees. The water lines are old and were installed in the early to mid 1970’s. I’ve spent a lot of money on repairs. Also, I purchased new Metron Meters. The water usage is still high. I feel like I’m just spinning my wheels.
I began replacing the main water lines with 6’’ ductile, new 3/4’’ tenant services, and new isolation valves. My roads are going to need re-paving from the lateral cuts . I could go to my local bank for financing; however, I would like to explore all options.
Does anyone have suggestions on financing?

Bank that holds your operating account and/or note is usually your best bet. I have used American Express in the past due to ease and speed of funding as an existing customer.


Hi @Dean8367 , Just my two cents, but how many and how big are the lateral cuts that need fixing? I’ve had to fix similar cuts in roads and have found a product that any handyman can install that works well to patch asphalt. Is called Aquaphalt 6.0. It has worked well for me and might be cheaper than hot patch or a total repaving.

Best of luck!

Yes, starting with your current financial institution may be a good place to begin.

Other ideas:
get an unsecured line of credit. Again best bet are local and regional banks and CUs. I’ve gotten several of these historically. Lines as high as $100k; given your asset size portfolio, you may be able to qualify for much more than I did. Expect rates of index +2-3%.

Credit Card promo offers - for at least the last 10-12 years, I’ve been getting offers from both existing and new cards with 0% interest promo deals. My record on a 0% term is 21 months.

Sell off a piece of the parcel. This one is a bit outside the box, but if you’re willing to part ways with a couple acres, then subdivide and sell. You would be retaining the majority of the parcel; just selling maybe 25% or less. Depending on values and how you structure both the dividing of the parcel and the end-asset (land, vs a “mini” MHP, vs other) you might end up with a good chunk of change.

Stop the bleed from your pockets if you haven’t already…are your tenants paying water/sewer or are you? If tenants aren’t paying, pass back those costs right away for both communities.

I invoice my tenants for their own water consumption from their own water meter readings. I also invoice for sewer. The issue is the loss of water before each tenant meters. The loss of water is underground which I’m responsible for.

Maybe you could switch to the Rubs system for water billing?

I don’t know if that would be legal in your case, but it’s worth looking into. At least until you get the breaks under control.

Have you ever used 0% promo credit cards? Using a credit card to pay subcontractors would be a cash advance, correct? Cash advances come with high interest. Also, have vendors charged you a 3%+ credit card fee on purchases?

Yes. Just use the convenience checks they issue with the promo. It will NOT be a cash adv. And yes, the 3% trans fee applies (some charge 5%).

Chase has a Business Line of Credit you can apply for.

When/If you apply, emphasize that you are essentially a property management company. They asked me a bunch of questions. They mainly cared about whether or not I owned the Mobile Homes; when I said no and that I only owned the land, they were interested in offering me a Business LOC.

The loan amount was based on gross income with a maximum limit of $250K.

What was the interest rate?

As of 08-2023, it’s a 9.25%

Hi there! It seems like you’ve been dealing with some complex challenges. I would go back to the bank that financed the park at acquisition and see what they would offer you in terms of additional construction financing- I think that is your best bet. Especially if the appraisal at purchase came back a bit high which would allow you to pull a little bit out without them feeling like they have no collateral- I’m doing this now on a project we own. Another solution would be to take on private loans from investors but at around 12% or higher interest this isn’t going to be cheap. Best of luck finding the right solution!