Financing a large park
Today I heard from a broker they will have a $4.9MM mobile home park going on the market in the next few weeks. She would have the details of the park in a few days after the appraisal is completed. She noted 200 spaces, space rent is $395-475 with double wide, single wide, and RV spaces. Owner probably willing to carry 20%. Oregon property taxes would be expected to be about $74,000 per year. Water/Sewer are covered by the tenants, garbage by the landlord. 100% occupancy (which is reasonable for the location of the park.)
I was a credit analyst for years and was the primary analyst on a few participating loans. I have also seen many of the difficulties that companies and individuals have had getting large loans. This is going to be the biggest hurdle that I have to overcome with this place. I have great connections but was always the guy behind the relationship manager crunching the numbers and have never been the one begging for the loan. This might be a little easier if this fell within the scope of a guaranteed SBA or USDA loan, but it does not because of the size, so far as I know.
I currently own a 4 unit property which has given me experience in owning and managing. I am a CPA candidate and will start taking the exams after we issue the comprehensive annual financial statements this year. My wife, who is also an accountant, would actively manage the properties while I would continue to work. I am prepared to handle the management, especially the books and financials. I also have family and friends who are good licensed and bonded contractors and handy people for any issues that would arise.
This property is especially appealing considering the high growth prices in Portland because of the growth in the area and limited supply of housing. I think rent is able to be raised immediately on all units too.
My questions:
1) Assuming that the numbers are as I expect, and I'm able to get this under contract, how can I ensure financing?
• Should I consider bringing in an experienced equity partner to assist with, mentor, and ensure financing?
• What about something like Fundrise or converting this into a REIT? Has anyone ever worked with them before?
• Are there any other financing options that you can think of?
2) I've read books on real estate investing and mobile home parks, have been listening to the bigger pockets podcasts, and understand the concepts and theory with what I'm doing here. What should I go back and re-read or re-listen to?
3) Am I in over my head? I was going to pull out equity from my current place to get a $300,000 to $750,000 deal. Should I stick with that range?
4) How much equity will I need to put in? I have about $75,000 that I could access from my current rental and could come up with another $25,000, but this is still small beans compared to what I'm asking for. How would I get these people to take me seriously if I'm not able to contribute the same slice of pie that I'm asking for.
4) What else am I missing?
Thanks for reading!