Property Manager · Syracuse, NY · Member since 2016 · 601 posts · 384 votes
Hey guys, I made a post to my friends on Facebook to see if anyone would be interested in selling a mobile home park or if anyone knew someone that had one for sale. I ended up coming in contact with someone who has a small 14 unit park with lot rents below average. The park owns 4-5 trailers and the rest are owned by the tenants. The park needs about $80-$100k in work but I think due to the circumstances we can get the entire park for $200-$225k but before I make my formal offer to the owner I want to see what kind of financing is available for a park like this. We have extensive experience in construction, remodeling, management, and SFH / MFH investing but no experience specifically in MHP investing.
San Antonio, TX · Member since 2009 · 3k+ posts · 1k+ votes
6y
@Ronald Starusnak Your options would basically be owner financing, bringing in private lenders and/or partners in on the deal. With the amount of work the park needs, it may be difficult to get traditional financing. Best of luck!
Rental Property Investor · Chattanooga, TN · Member since 2016 · 52 posts · 39 votes
6y
You may be able to find a local bank that's willing to underwrite the deal with the right proposal. That's the single biggest barrier to purchase with small parks like this. Just be prepared to talk to a lot of banks and hear a lot of "no's" upfront. Also, make sure to write in a financing contingency in your offer.
If you bring back a list of 20 banks who all shot you down based on the condition of the park (financial or physical), the owner may realize that they're going to have to get creative to get a decent sales price. I'm trying this currently with a 100 space park with an amazing 8% financial occupancy. Ha! No guarantee it will work, but it can at least help re-ground the seller's expectations.
On the plus side for your bank argument, MHPs have one of the lowest, if not the lowest, default rates of any commercial real estate asset class. Just make sure you are solid on due diligence and making sure the demand is there - it sounds like it could be a good opportunity!
Folsom, CA · Member since 2018 · 134 posts · 100 votes
6y
@Daniel Smithson I love your idea of bringing the owners a list of banks that declined to finance the park. The owners, especially since they inherited it, might not be well versed in real estate or MHP’s and may not understand that financing can be difficult to come by.
I know of a company that does offer smaller loans. I haven’t used them but I got their number from another member on here. Shoot me a pm and I’ll give you their contact info.