My name is Colin and together with my partner Rick, we bought a 150 space park in Burlington NC. One of the first challenges we faced was filling the vacant lots as fast as we could. So we bought, rehabed, setup and sold 16 homes in 10 months.
As you can imagine this used up a lot of cash, so we began selling the notes we created to our family and friends. Because of the relationship with F&F we wanted to make the investment very attractive and also as passive as possible, as none of the investors lived in NC. We structured the note purchase as follows:
The minimum return to the investor was 15%
The note terms ran from 84 to 120 months, depending on the home and price.
Our on site manager keeps an eye on the homes, and we act as the agent to collect the rent (payments) and disburse them to the investors at no charge.
The first payment to the investor starts on the first day of the month following funding, and all other payments are mailed before the 5th of the month.
We guarentee the first 12 months payments to the investors, so that in the event a buyer does not pay, we make the full payment to the investor.
We qualify the buyers ( I am a commercial mortgage broker in my other life)
to ensure they can afford the payments, and we collect a minimum of $2000 down on a single wide and $3000 on a double.
Our amortization schedule shows the investor how the buyer will make his principle and interest payments, and when all the principle will be recaptured.
Several of our F&F s used their IRA’s as the investor.
In the event a buyer skips town in the first 12 months, we will replace the buyer and note at no charge to the investor. Any repair costs would be for the investor’s account.
We make sure that the payments for the home, lot rent and insurance are below the rental of a 2 or 3 bed apartment, in our case this is $600 for a single wide and $700 for a double.
We are now looking to add 20 more homes to the park, some will be repo’s and some new. We will buy, rehab, setup and create the notes, and we are looking for new investors to buy these notes and so keep the cycle going.
We would like to offer the same deal to new investors as we gave to our Family and Friends.
The method we use to sell the homes is with an Option to Purchase tied in with a Net Lease Agreement. This is the way Corey and Steve showed us at the boot camp.
If you think this is someting that would interest you, please give me a call or email me.
Thank you
Colin Clemitson
Ph 916 773 3975 Office
Email: mobilehomeparks@surewest.net