I attended the last boot camp and have been making some calls to brokers lately in my search. It seems several brokers have been reluctant to speak with me because I haven’t owned a park (or any multi-family/commercial property) before, and they are asking whether I have been pre-approved for a loan amount.
After listening to Frank speak about security mortgage group, my plan was to use them as loan brokers.
Perhaps I’m missing something here. Do I need to find a bank to give me a pre-approval letter? Surely security mortgage group doesn’t do this, as they’re brokers not a bank, right? Any help is appreciated.
I am also new to the game, three months. I have not yet been asked about approval, however I make it clear up front I have capital and credit to make the deal work. I am presently working. A deal where the plan is the redeed the property without additional unwanted land. I have submitted a contract minus this land and we are moving forward. No one has asked about approval yet, but I see no issues making the deal. I will bring over a 100k to the table at closing.
If you are unsure about your chances at approval, you could see what amount you can get approved for.
As a SC Real Estate Broker and a Mobile Home Park owner I would highly encourage you going to all of your Local (Local…Local…Local) Banks and getting a Pre-Approval Letter (since you do not have a specific MHP).Some Local Banks will loan on MHPs and some will not. Thus, keep knocking on the doors until you get a ‘Yes’.The Local Banks will probably want to know if you have experience with MHPs (or multi-family properties). However, we all have to start somewhere. Make sure you have a good Business Plan with some great articles to help back you up :-). Our Local Banks seemed truly interested in the Business Plan and how we were going to turn the MHP around. Once you get a Ratified Contract on a MHP you can then shop the Local Banks (with Commitment Letters) against the Security Mortgage Group or any other Bank/Mortgage Company.We just purchased another MHP earlier this year.Even though we put 43% Down, had excellent credit and other assets, we had to search out 3 Local Banks to get Commitment Letters (from all 3).We selected a Local Bank that offered us 4.75% with a 7 year balloon and a 15 year amortization ($300,000 note).We wish you the very best!
Getting a pre-approval letter will help. Also document your cash in the bank.That said, none of this was relevant on my first deal (directly negotiated with the seller). But I had good credit and a good job. The small local bank was making a loan to me (personal recourse) as much as making a loan on a mobile home park. You are the asset on your first deal with a bank.Good luck,-jl-
Jefferson made a great point:"Also document your cash in the bank."I would add that you will want to do a Financial Statement. All the Local Banks we received Commitment Letters from needed our Financial Statement. Our Financial Statement was an Excel Spreadsheet that we created, signed and dated. We did not have to have our Accountant create it.We wish you the very best!
Dean, you are correct. The Financial Statement just showed the Net Worth (Assets versus Liabilities). It was an Excel Spreadsheet with a Column of Assets minus the Column of Liabilities.We wish you the very best!