All Forum Posts by: Dave Rav

@John Boutros

hey John.

Traditionally, this is more challenging than getting loans for other multifamily asset classes. Most banks won’t lend on them.

Just went through this process on a small 5-unit MHP. Out of about 20 banks consulted, only maybe 3 would consider it. This included local banks and CUs. Out of the 3 only 1 would seriously consider. The other 2 showed obvious signs of trepidation and only minimal interest in my deal.

Long story short, it definitely helps if you have all TOHs, paved roads, asset stabilization, and near-full occupancy. Strt your conversations asking if they are familiar with MHPs - if not a confident “yes” then you know the score. That will save your time and theirs.

FB marketplace, for sure.  Just need to be a "person" listing the ad.  (FB changed their rules recently, and company profiles are not permitted to list).

The other option is targeted marketing with ads through Facebook. I've never done it, but can imagine the cost is much higher than regular marketplace ads.

@Shane Schrader yes, continue to do your Due Diligence.  Those SWs being 1960s models are likely worth next to nothing (as they are beyond life expectancy).  Use this in your determination of purchase price.  The overall value of the deal will be more biased toward the land, as opposed to the structures on it.  You still need numbers on expenses.

I agree with @Benjamin Aaker.  Cap rates are only 1 method, though they can be helpful.  Also know that there are a few different ways to calculate cap rates.

At any rate, one thing you need to figure out on that MHP are the expenses.  Also, please know that POHs (as viewed by banks or other lenders) are typically NOT given the value they deserve.  This is important, as it has implications for refinancing OR when you sell, it could affect your Buyer's financing.  Take home:  there is not much hard value in POHs.  (though there is super value to the investor from an "income-generated" approach).

What are the years on those SW?  What is the going rate for lot rents in the area?

Good for you!  Sounds like you're off to a great start. Couple things I would recommend...

Dont make things more complex than they need to be.  You mentioned the SAFE Act.  Might be beneficial to take a look at applicability here.  Are you a (licensed) mortgage originator?  

As for garnering interest, 50 messages in awesome!  Our experience has shown that many potential buyers and tenants of MHs "talk a big one".  Only truly about 30% are serious or can actually qualify.  Recommend you start the screening process as soon as folks contact you.  Ask about downpayment, sources of income, pets, affordability, etc.  Also tell them about the home, send pics, answer any questions they have.  Some people have a totally different idea of the home, OR dont fully read your ad.  We once had someone go all the way through the process, complete a background screening, and was about to put down money only to tell us "This is a 2 bedroom?  I need a 4 bedroom home."  

As for promissory notes, etc, you might engage the help of an attorney if you're not versed in this.  There are templates out there, but if you lack experience here getting help from the pro's is recommended.

@John Boutros, I'm around.  Also trying to expand/grow.. either MHPs or apartments..

Another disappointment by the insurance industry.  As Americans, we are increasingly left "uncovered" with virtually all insurance policies we have anymore.  Be it health, auto, home, and now your reporting title insurance.  I'm not one to invite government involvement or control, but its time the government step in to regulate these crooks.

We pay for a service (policy), and should receive such.  Now, this can be outside of gross negligence/abuse, and maybe a small list of exclusions.  The exclusions shouldn't total dozens of pages!  It shouldn't be about how the carrier can avoid performing.  End of story.   Fine print loaded with "gotchas" is illegal in many other industries and business dealings.  

Something (insurance) utilized by nearly the entire population (not to mention, in many cases individuals are REQUIRED to carry said insurance) should be better regulated to protect the consumer.  Its like gasoline for your car, or utilities for your home.  I'd estimate at least 95% of Americans require these goods.  The industries have a product/service needed by everyone. Thus, they must operate under regulations that protect the consumer.  Can you imagine if you went to the gas station, paid for fuel, and they filled your car with 50% water?  Would never happen, they must perform.

Thanks for hearing me out :)

@Patrick Drury, @Jonathan Greene, @Jenell Poncabare, @Wale Lawal, @Amber Forkey

Thank you all!  I actually met with my first PM today.  Granted, he was a warm contact.  He didn't exactly have what I was looking for, but we had some great conversation.  I'm going to network with a few other local PMs over the next 1-2 weeks.

@Drew Sygit thanks!

@Amber Forkey I have not.  I'm intrigued by this approach.  So, you're saying to reach out to PMs and see if they have clients who may be motivated to sell?  I'm open to hearing more.

Thanks!