Saw a MHP come up on the MLS the a couple months ago. It caught my eye but I was busy with other deals at the time. It’s still there and I’m really thinking about it. I have bought just apartment buildings so far. They are great and are creating wealth every minute of every day. But I can’t buy them fast enough to “semi-retire”. By that I mean having the ability if I wanted to…aka making more money passively than my bills.
Then it hit me. I had read about MHPs and Lonnie Deals for years and I have the opportunity to do both! PLUS there is alot of room for equity growth which can speed up our growth. We could use that money for another MHP or further our Apartment building portfolio.
That being said here are some factoids on this MHP:
Insurance: Owner says they pay 600 per year but I have not called around to cross check yet
Single-wide lots: 22
Double-wide lots: 3
Total Lots: 25
Total Lots Rented: 9 with a 10th coming soon I hear
Lot rents vary greatly: $175-275
Here are the numbers I have so far: Inc - Rent: 32,769; Total Inc/yr: 32,769; Exp - Electricity: 1,001; Exp - Ins: Fire/Liab: 506; Exp - Maintenance: 1,180; Exp - Taxes: 4,000; Exp - Water/Sewer: 702; Exp - Other: 1,808; Total - Exp/yr: 9,197
note Park owner owns one home that will be rented (they are renting for 400 plus 250 lot rent) soon along with two others that are being torn down. Owners son owns 3 as well but lives in one, rents another, and one is being torn down.
Most of the waterlines were replaced in 2011. BUT it does mention that after 14 lots are rented a water analysis must be completed. Is this a big deal? People are using the water now…but it’s under 14. What makes that the magic number?
Owner is selling due high nursing home costs. I asked their realtor if they would consider seller financing since they are very motivated and was told no because of the need for medical care. That indicates to me that they are very motivated. High bills + distressed property
I have done alot of calculations based on reading I have done and I come up with numbers anywhere between 155,000-220,000 depending which I use as a good purchase price for the park.
I’m ok with going to the bank. We have plenty of cash for a 20-35% down payment. But i’d like to preserve our large chunk as best I can by using creative means to purchase a few properties.
I thought I would offer them $150,000 with $50,000 (to help with the medical bills) down. Or maybe start with $30,000 down and they finance the remainder at 6-7% for 3-as many years as I can get. I suspect that, if they agree to seller financing, they will not go for any longer than the 3 if they need it for nursing home costs.
Other thought is to offer the $150,000, with them financing 50% and the bank finances the other 50%. Gives them a very nice LTV ratio. We could put 15,000 into it to get some “skin in the game” for the sake of the bank.
But I want to borrow money to put in mobile homes. That money would be put into escrow and only used as we buy, place, and repair mobile homes. Has anyone done that before? What do the banks think of this?
What’s everyone’s thoughts on this park? Good deal? I think so but the SAFE act has me worried. My original play is the ‘original plan’…buy a MHP and get rid of park owned homes and get it back to a land only deal.
I’m hesitant to just rent the mobile homes. I see the damage people can do to apartments. I would much rather sell them…