Hard money loans for manufactured homes

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Hard money loans for manufactured homes

Derek Lovett
Investor · Fallbrook, CA · Member since 2014 · 7 posts · 0 votes

I'm currently flipping two properties in 55+ land owned mobile home parks in north San Diego county. I have had trouble lining up affordable hard money loans. As soon as a lender hears "manufactured home" I'm shut out. The new manufactured homes use a permanent foundation and are legally real property when they are completed. I found a lender nearby that will loan on manufactured homes, but I'm paying a large percentage in brokerage fees. There are a tremendous number of opportunities in the older land owned parks. Any ideas on where to find cost effective lenders for manufactured homes?

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  • Belinda Lopez
    Specialist · Houston, TX · Member since 2012 · 579 posts · 301 votes
    12y

    Derek, look up John Fedro on here and see if he might have some resources for you. I highly recommend you network at your local REIA group or Meetup groups. Don't forget you can also you your family and friends Self-Directed IRAs and give them a nice return to help fund your investing.

    Manufactured homes depreciate very quickly so for a new home, you are going to need a large Loan To Value on the home.  Used homes are usually much cheaper to purchase but can sell higher if you can owner finance them out.  Good luck!

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  • Bruce May
    Lender · San Diego, CA · Member since 2011 · 664 posts · 231 votes
    12y

    Derek,

    I know several hard money lenders here in San Diego county, but I can't say if they loan on mobile homes. There are however, several private lenders that go the North San Diego Real Estate Investment Association meeting and lend money where others won't. The next meeting is on Oct 21 and you can get details at www.nsdrei.org.

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  • Keith Anderson
    Real Estate Lender · Atlanta, GA · Member since 2014 · 48 posts · 9 votes
    12y

    Hey Derek, 

    Just one program I have for MHPs.

    • Drexel Commercial Bank Alt #1
    • - Loan Amounts: $100,000- $2,000,000
      - Loan Amounts of $2-$5 million, over 2 million are considered on a case by case scenario.
    • - Property Types: Multi-Family, Mixed-Use, Retail, Office, Warehouse, Self-Storage, and Auto Service (no gas stations or underground gas tanks). Case by case a Mobile Home Park. If I didn’t list the property type here we are probably not lending on it. The only grey area I have is if a bar/restaurant is a tenant in a mixed use building or strip mall, we can possibly do those.
    • - The property types this program does not lend on at all: Hotel/Motel, Day Care’s, Adult Living Facilities, Boarding Houses, Funeral Homes, Stand Alone Bars and Restaurants, Gas Stations, Car Wash, Land, anything Agricultural, Manufacturing, Schools, etc.
    • - No Gas stations, Day Cares, Restaurants.
    • - Loan Purpose: Purchase| Refinance| Refinance Cash Out
      - Initial Fixed Rates: 3 & 5 year options
    • - After the fixed period of the loan, the 3 or 5 year option, interest rate adjusts to: It is wall-street prime which is currently 3.25% plus the margin of 4%. So in 3 years if WSP is the same the rate would be 7.25% (3.25% plus 4%). One thing to keep in mind is the start rate is the floor. If the start rate is 7.99% the rate will never go below that.
      - Term: 30 years fully amortized
      - Rates: 7.49-9.99%
      - Loan to Value: 75% on Multi Family and Mixed Use, All other property types 65%
    • If borrow wants an all cash out refi lender minuses 5% from LTV, if borrower is also a new borrower (this is there first real estate deal, lender also minuses 5% from LTV).
      - Minimum Fico: 650- strict!
    • - Program allows a seller assist on the down payment of a purchase which will total 3% of the total loan amount.
    • - Program allows a seller second to carry up to 80% CLTV.
      - Unlimited Cash-out (remember if all cash our refi on free and clear, 5% is taken off of max LTV.)
    • - Can blanket some commercial properties if they are right next to each other, case by case scenario.
    • - Deposit for appraisal is around 3K.
    • - Closing costs around $2,300; wrapped into loan amount.
    • - An environmental is required for all properties, which costs from $1,500-$2,200; wrapped into loan amount.
      - Prepayment Penalty: 5% of the total loan amount, only when loan is in the fixed rate period.
    • - Multifamily and Mixed Use properties with a loan amount of over $750,000 may possibly be offered a better rate on a case by case scenario.
      - Population requirement: City must have a population of 25,000 OR be within 25 miles of a city with a population of 100,000.

    - Program offered nationwide…Exceptions: TN, North and South Dakota, and New Hampshire, IL, MI

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