All Forum Posts by: Mark Wooldridge

I currently have two facilities in Alabama that are seller financed.  Original terms were 2 years on one and 3 years on the other - I renegotiated both of them out to 2029 (total of 8 years) - and really glad I did!  3 years is the minimum you want, try to get at least 5 years - Think of it this way - you probably need 1 year to get it running like you want, and 1 year to 'get it ready' to sell or refinance.  This is not a passive investment either, you will be busy.  Additionally, what is the amortization, or period of years the loan is based on 20?, 25? 30? - The more years, the smaller the payment but the less principal paydown of course.  Also, if you go to refinance you better be above 80% occupancy.   And I'd check out how much the bank will tend to loan - it probably won't be much more the 70% of value - if they like the property.  Self-Storage, being an actual business - can qualify for SBA loans - you may want to check that out.  Think about the end game before you go in - how are you going to get out of the deal later?  I see you are in Brackettville, population 1,360 - is the SS facility in this area?  If so, you will likely be buying and holding it 'forever' - not many buyers for something like that - typically the only folks that want something in a rural area are those looking for a retirement project with a little income - which is a good thing if that is what you want.  Good luck!  

A super concise and accurate summation of the SFR & MF property market - only thing I could add to that is how extremely low interest rates (historically) caused valuations to increase at a faster rate than they would have otherwise. That's another string by itself...

My suggestion would be to call the park manager, and tell them what you are attempting to do.  They may waive the 55+ requirement while you work on it, as long as you rent/sell to a 55+ tenant.  They want that lot occupied and rented - so in a perfect world their interests are aligned with yours.  Could be the start of a beautiful partnership - you could become their 'go to' remodeler when other folks leave...

That's wisdom and experience talking.  If the most important thing doesn't work (the market) - then nothing else matters...   Thanks for showing us how to save a lot of time!

Could you put 'regular homes' on this land?  could change the equation to the upside if you can - of course market would let you know if this is viable.  

Try comparing 2 bedroom apartment rentals as those will likely be your primary competition if there are few MHP to compare with.  Figure out a price you think will work, Then run an advert on Craigslist or similar to see what kind of interest you get - you can always say 'sorry, that one you called on is rented but I should have some more coming up soon?  would you like me to contact you when that happens?  Keep in mind the rule of thumb is 3 calls converts to one visit, 3 visits convert to one sale.  That should get you a sense of the market.  As for valuation, you would be doing all the work to fill it up, so that increase in value should be yours - don't give that to the seller.  Valuation should be based on 'as is' cashflow - you may need to kick in a little to make the deal, and knowing your market will give you a range.  The houses themselves, depending on condition - is a guess - but by themselves they are not worth all that much...

Any chance you and seller could split the deal into two portions? If the SF home and some acres appraise high enough, you might have something to work with. Note most appraisers don't know how to value land much over an acre or two, unless there are comps in the area that they can compare to. Two loans are your best bet - 0ne from VA, one from Seller - If Seller is motivated they'll work with you, especially if they get a substantial sum from the SF home sale.

A lot of due diligence will be required - one big one:  What kind of base is under the tracks?   This was originally built as a rail car manufacturing and repair facility, so the base may be just enough to handle empty cars - Fully loaded cars could be an entirely different matter - If the base isn't sufficient for the weight, big problem.

Buck,
As I understand your problem, it is not with the land, it is with the double-wide itself.  If it is a land problem and 'bad title' - then going thru title companies, lawyers, etc. is the only way to go, my condolences... 

BUT, if your only problem is with the double-wide - please go back and follow the link I gave you previously.  The fact you have 'no-title' for the D-W, and as you mentioned previously there are no lien-holders to be found - means you are set up marvelously to call the D-W 'abandoned property' - this happens frequently, and the State of Texas has a process that will create a new title (since it is personal property, not part of the land) - that will be in your name, and will be sell-able after that as it will be a good marketable title from then on.  You will need to get the tag # off the side of the house (or inside the original sink cabinet door if not available) and fill out the application in the link I sent you.  This will be much easier than any of the other actions you have been contemplating.  Again, good luck!

You might have better luck telling the State of Texas it is an abandoned property - from what I can tell it only takes 4 months of sitting idle to be eligible - they have a process where you notify previous lien holders, and if no one claims it - you can have it declared abandoned and it's yours...  https://www.tdhca.state.tx.us/...  Type in abandoned in search box and you will get some links.   Either way, you get to own the home or you find someone to hold responsible for getting it off your property.  Good luck!