I have located a new park build with no homes on the park. The meters are in and all on city sewer. All that needs to be done is the marketing to fill the park. How could I buy this park? I do have cash to put down.
Howard
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Interesting. You could go with the CASH program from 21st Mortgage.
BUT to be honest you need some serious $$.
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The question was “How could I buy this park?”
Loan on land value only. I doubt you would get any credit for what it may be in the future. Perhaps do the deal where you borrow whatever the bank will loan and the owner holds the rest of the paper if it doesn’t cover it.
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in my opinion you are running up hill. i don’t know how it is there, but here in Oklahoma, it will cost over one thousand dollars to move a home. Are you looking at buying used homes or new homes?
I’m going to guess that a lender will require a minumum of six months reserves to cover expenses while you are filling it. You will need a hard business plan for filling it. You can buy homes, or partner with a home manufacturer/seller that will bring in homes. Some will set up a model or two in a park.
To make sure it’s a good deal/decision, Check history … why is someone selling… who built the park and why didn’t they get any homes in it? Consider this… I buy a piece of land, go through permitting/zoning, i get someone to create my lot, water, power, sewer line layout. Now I pay for all of those to be physically set up. THAT WAS A HUGE CHUNK OF CHANGE, UNLESS ITS NOT MANY LOTS. The gravy was at the end when cash flow started.
So you can buy it if you have 2 times the initial cost to work with. The best thing to do is start contacting banks. They will want to look at your credit, income, resources, past experience with similar projects, and your business plan. Consider what a partnership would look like if necessary.
When was it completed?
How long on market?
Did owner attempt to fill?
Does the income there support selling new homes? $25,000+
If you are filling with used homes, where will you get them? There aren’t tons of them around here.
Are they often sold in your area? again, cost to move homes in?
Has the city/town signed off on everything being done, inspected, approved, and there are no administrative orders on the property?
I would prefer a park with some occupancy, but an upside.
good luck… please let us know how it goes… positives, negatives, road bumps…it helps us learn.
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Actually, when building a house, the bank wants you to own the land. Not sure if the same applies here or not.
Perhaps I misunderstood. I thought the original poster was asking how could he buy (with some money down) the park - which at this point doesn’t have any homes. My point was that the bank would only loan on what the land was worth - which is probably less than what the purchase price is. To finance the rest, they may have to get owner financing for the rest. Then they would own the park, and then work on getting it populated.
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You say you have cash to put down. You put it down in front of the seller. That is how you buy. If you need more money, you will need to turn to partners (equity) or the capital markets (debt). How much is the location and permitting and zoning worth going forward? It’s about location. And risk and costs.
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