Hey BP gang, how do you deal with a MHP appraisal? I just got a quote from the bank on two different appraisers for $2200 and $4400. Since the parks evaluate on an income basis, how is an appraiser going to figure out value if he doesn't have any financials that I'm aware of. I suppose he could request them, but I doubt they'll do the kind of work I'll do on the project to figure out value. Just wondering as that's a decent sized check to write for an appraisal.
@Matt Kauffman , the appraiser will have you walk thru the financials with him and confirm certain #'s (# of lots, avg. lot rent, who pays water/sewer, etc.)
@Matt Kauffman , it is highly dependent on the appraiser as to the quality of your appraisal. Ideally they will use someone who specializes in or at least has experience valuing MHPs. I am not sure why the appraiser would not have access to the financials if the bank is considering loaning on it. I don't know of any bank that would do a commercial loan without knowing how much income the collateral is generating.
If you can, I would call the two different appraisers and determine what their level of experience is with MHPs. Go with the one that has real experience because if they don't, God only knows what kind of a value they will come in at, but it could be ridiculously high or low.
Thanks for the response. I'm going to call the bank and ask some questions about these appraisers.
@Matt Kauffman Good question!
Let me listen in.
@Matt Kauffman what questions did you end up asking the bank regarding the MHP appraisals and what were their answers?
Hey, I wish I had more to tell you, but I don't. I walked away from this deal due to water issues. There was one well for 35 sites, 2-3 locations only to drill new wells, and a significant amount of money needed spent on putting up a building to house storage tanks so that the park would have water and pressure. compounding the problem was the well drilling company telling me that they'd drilled 2-3 wells years ago that came up empty. Too much risk for me to take on.