Options for parks with existing mortgages

Got a park in my sights that has an existing mortgage.  The park has been run poorly so financials to support a new bank loan are will not be an option.  I would l like to take over the mortgage.Is it legal to do a wrap around mortgage or subject to or some other creative finance?How would you structure?

You should:

Get a copy of the mortgage to see if there is a due on sale clause
Contact the bank regardless to see if you can refinance under more favorable terms

A thought: Setting up a separate LLC to acquire the existing mobile homes (assuming the mobile homes are not held as collateral for the mortgage), would not interfere with whatever the mortgage says.  Raising capital for this LLC to then acquire additional new(-ish) MHs for the property would greatly increase the cash flow into the land via the lot rents (and, to a lesser extent, into the MH LLC itself).  That would enable you to get a higher valuation on the land and almost certainly refinance under more favorable terms.

My 2 cents worth,


Thanks Jefferson, I was thinking along the same lines.  We are exploring a master lease right now as well.

Jefferson, do you ever buy 70’s and 80’s late model homes to bring into your parks or only newer models?

Brian many of the homes built in the 70’s into the early 80’s were plumbed with polybutylene (PB) tubing, it is silver gray in color.  That type plumbing system developed pinhole leaks, the plastic fittings cracked and plenty of water damage took place without the homeowner’s knowledge.  Be careful buying something in that model year range, Be sure to look it over very well before purchase. 

Master Lease with Option would be what we would do in this case. We have done identical deals in that manner. It’s your safest option and the best for all parties.

MLO is a good way to go.One other thought on how to buy an unfinanceable park with no financials is to purchase the park with very minimal down, and nearly all seller-carry.  You then run the park for a year - entirely above-board, deposit every penny in your bank.  After a year, you have a financeable transaction you then take to a bank and get a proper mortgage and take-out the previous owner.Good luck,-jl-