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.
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.
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?
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.
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!