This is big boy territory for me now.
Park is on city utilities
250,000 population city
25% increase in population in past 10 years
high demand for affordable housing
80 unit park 90% occupied
all park owned homes****
avg lot rent in the area is $250-$275
selling to me for either $1,125,000 and they will hold 20% 2nd for 15 years at 4% interest
or selling to me for $980,000 and they will hold a 10% 2nd for 15 years at 7% interest
I have bank financing that will allow me to do this deal and have them hold a 2nd.
- Should I buy this park?
- Best way to go about with the park owned homes? From what I have heard from Frank before is to go knocking on each door and asking them to buy the home or we won’t be able to renew their lease. I would probably have to move to this city for a year.
- Which option should I take? Higher price but I have to come less out of pocket and have a 15 year low interest rate or take the lower price and try to find some money. I have all my money ( about 1 million net) tied up in 2 other parks and single family homes. I could probably come up with money from either a Line of Credit or hard money cash out if I really needed to.
My goal is to move there, sell all the homes. Get at least $2,000 down for each home… getting me around $150,000, get lot rent to about $275, cash out refi and pull out about $500,000 still keeping the sellers 2nd if I chose the 4% interest. Then using the hopeful $500,000 to buy another park even bigger.