I need some advice guys. So I’ve been trying to buy my first MHP. I’ve come close on two offers but the seller backed down both times. I rarely disclose how much capital I’m working with but I figure what the hell. I’ve got up to $35k to put down on a park and I’ve got extra for due diligence expenses. I know beggars can’t be choosers but I’d like to find a seller financed deal that not only can support the note but also can leave me with approximately $1500 a month cash flow using a 50% expense ratio in my calculations. I’ve been looking everywhere across the U.S. preferably in the mid-west but as long as there is a legitimately strong demand in an area, I’m happy. Are there still deals out there where this combination can exist? I’m thinking I could pull this off with around a $400k park but so far my $35k has been a laughable amount down. What are you guys thoughts?
The deal you seek exists but it would take a lot of time resources, effort and energy to find. Luck is also helpful.
You have 35k which is not a lot . That being said , we have done deals with less money. Realistically, a lot of sellers even on seller carry may want 20-25% . The lowest one I had under contract was for 9.9% but you were going to need money and strong nerves (fell apart due to some other issues).
I have a deal we are working on that fits the bill of what you are looking for that we would hopefully get under contract. Has been a couple years in the making . Except the appx 35 k translates to a 25% down payment. It is not generating any 1500 positive cash day one ( you are essentially looking for 50% cash on cash day 1 and you need to create those deals). This deal we would probably be buying at a 9-10 cap on actuals but the rents are not quite half of market.
So as I said your deal exists but its going to be really rough to find just like that. Some other things you might consider. Realistically , you are wanting an extremely high CoC return. Again, possible but most people would not recognize them. If you start looking at value add deals with potential for upside and refinance, resale (liquidity event) , you would be more probable to get the high returns you are going for.
Ie buy a 100k park for 20k down then jump the park value and sell after the second year for 140k. That is probably going to be more realistic with a low budget if you try and figure out how to grow your capital base.
Some other things you can think about, you only have 35k but maybe you can find a good deal and find a partner for it. Perhaps this deal requires 80 k down. You can put in your 35k ( and then since you also had the deal maybe that adds a little value and they contribute the balance. Remember, half of a good deal is better than all of a crappy deal.
Aside from that, know how you are going to operate the deal because its going to be a smaller park if you aren’t willing to look out of the box.
Hi and thanks for the advice! I couldn’t agree more. I’m going to keep plugging along in the meantime trying to structure these deals accordingly. I’m used to having to search for needles in haystacks and I’m starting to think this is one of those things, lol!
What state are you in, if I come across something I can pass it along
Your profile says Florida but I was just making sure.
Thanks @Louvie! Yes I’m in Florida but am open to buying anywhere except the North Eastern States.
Why are you limiting yourself to $35k? Why not find friends/family that are also interested in passive income? Find friends with IRA that hate the stock market and steer them through the self directed IRA process. In my view, finding the parks is harder than finding the money…my 2 cents
Everyone I know is tapped out.