Investing with No Cash?

8 Replies

How much cash do you typically need to invest in a mobile home park?

Are there strategies to invest in mobile parks with no money (using other people’s money)?

You can always invest with no money, it's just very risky and you have to prove to the lender that your property will do good and be profitable. Did you do an analysis? Did you include the mortgage in it? And all of the other factors in an analysis. You have to include all of these things into an analysis and prove to the lender that your property is profitable and that you would be able to handle it. Don't forget in the beginning that you have to find a lender in the first place as well.

Any mobile home park experts you recommend I learn from?

@James Lee sorry I don't have experience with mobile home parks, I just answered your question based off of doing regular real estate investing, not mobile home parks. But search around on YouTube, and google and see if you can find anything, you probably will. Good Luck!

One low/no money down strategy is a lease option. A lease option would allow you to have financial / operational control of the park for a defined time period (i.e. 2 years) without actually buying the park from the owner. At the end of the term (2 years in this scenario), you would have the option to buy the park at a price determined at the inception of the lease option. Most owners will want you to put something on the table (e.g. $10k) to show you're serious. These types of deals will be pretty rare; owners will really only use this a last resort if they can't sell their park (because it's extremely distressed, etc.). 

Realistically, if you don't have cash, you should have experience or bringing something else to the table ( i.e. the deal) .  

My favorite experts in MHP are Frank and Dave.  They have done a bajillion deals.... ( maybe few hundred parks give or take at this point) .  I don't think anyone out there has done close to this volume who is offering education.  Im a frank and dave student and a lot of the people out their scaling up have all at least been to the bootcamp. 

 I have done a no money down MHP deal ( none of my Own money) but did source the deal, did source a portion of the capital. So its possible but you are probably at a minimum going to need a deal , and the relationships to tie it together.  Also have had an opportunity to just take equity in a deal for sourcing it and having an operator do the rest. 

On the flip side, you can pretty much invest any amount of money into a park.  50k? Theres a deal for that, 100k , theres a deal for that 1M there is a deal for that.  If you know what your bank roll is up front, you can work to work backwards and find your deal. 

Ie you have 250k, you might want to look at parks around 800kish.... Assuming 25% down and keeping some back for reserves etc.   This will also depend on capital needed to get the deal rolling or homes you might have to fix up etc. If you have a real capital intensive deal ( say 100k in road fix up ) you will want to factor that in ) . 

All things are possible in mobile home parks ....... but don't go thinking its your first deal, no experience and you can land something crazy good  ( actually i take that back since my first deal was just that- it was a small but goody  but it was real cheap bought for cash but needed a whole bunch of cash to get it rolling- plus a lot of hands on education for me) !

@James Lee Usually, you'll have to put some money down depending on the avenue you go (i.e. seller financing, bank financing, private lending, etc). If you're low on cash, you may want to bring in a partner. If you can find a good deal, you should have no problem finding others to partner with you. Good luck! 

@James Lee if you haven't already, head over to mobilehomeparkstore dot com.  Thats where you'll find most of the MHP info that you'll need!  They have a great forum and other resources.  

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