I have come across a mobile home park in GA (about 1 hour south of Atlanta), which I have worked out some interesting terms on. In turn, I wanted to get some feedback from the community on whether this is a good deal, given how it is structured and the returns it offers. Also, I want to hear feedback on if how the deal is structured would actually work. The seller's agent checked with a local real estate lawyer who said it would (is he right?).
The agreed upon sale price is $125K. The seller will contribute 4% towards my closing costs and closing fees. In addition, the seller will also give me a $10K credit to help me pay the downpayment. These two credits greatly reduce the amount of cash I have to bring to the table, while the sales price allows me to get a commercial loan as its priced high enough. The sale price was agreed on so that I can get a commercial loan from a lender. I was trying to be as creative as the owner would allow me to be.
The one tricky thing with this particular property is the zoning. The mobile home units are grandfathered in and can stay, but if they were to burn down or be destroyed the town would not allow the owner to replace them. They can however be fixed and maintained.
I would really appreciate some feedback on this one. Also, if anyone is interested, I would love to bring in a partner for it.
Please see a screenshot of the BP rental analysis tool below.
So the first question is, what's the worst case scenario. Something happens and the homes are destroyed, what else can you do with the land?