Refinance MHP questions

Hi MHP community,
I’m planning to refinance my MHP. It’s currently 100% occupied in a very strong market and I have increased the NOI by 30K since I bought it. What are the key elements to be able to successfully obtain a favorable term sheet from lenders and also able to potentially “cashout” the value-added sweat equity? I understand appraisal will play an important role and am wondering besides the NOI, what information I should look for to get a realistic expectation? What kind of term do you guys see out there recently? Thank you!

Appraisals will go anywhere between 6-9 cap (typically… maybe some other markets may go lower or higher) and this largely depends on 1) The appraiser 2) the evaluation method they are using 3) how nice your park is will also give you a lower cap rate.

This is a very nice checklist you can use to give you an idea on what lenders are looking for: MHC Loan Eligibility Analysis.pdf (428.6 KB)


Thank you @Gonzalo it’s very helpful. I remember usually lender will provide 2-3 third-party appraisers to choose from. Based on my experience, I feel some appriser did a pretty good job and some still using outdated information. Is there anything you would check to pick one that fits the job? Thank you.

I’m not quite ready for a refi, but it’ s been on my mind. How long have you owned your park?

You will want to interview and ask how they are valuing the property. For the max buck, you will want them to do something along the lines of “Income approach” which is strictly - how much NOI is this property generating? You want to stay away if they do dubious “Land and home approach” where they give value to the land and homes and then appraise that. You will definitely want them to be familiar with MHP’s, some of them only do residential or agricultural or even apartments. Usually them not being familiar will cause a lower appraise (Though sometimes it may help you out).

Your mileage may vary…

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