I was just told that I could get seller financing on MHP

[Keegan Uderitz]

Hello!

I ran into an owner who said they would sell for around $900k. I have no idea the income on the property (yet) but there are 7 mobile homes on the 1.4 acres. What do I do?! This could be a great opportunity for me. What are the first steps? How do I structure seller financing on a mobile home park?

[Brenden Mitchum]

Hey @Keegan Uderitz, welcome to the BP community!

Unless you're smack dab in a major metro or in CA, $900k for 7 homes on land sounds very steep. Keep in mind this isn't really an MHP and won't be considered one by banks - it's just too small. This is important when thinking about exit strategy. Do you plan to sell the park one day? Will you also seller finance it? How about just refinancing to pay off the seller? How will you do that?

Getting income info asap is important because likely they arrived at that number by lumping home and lot rent together. So, NOI might appear high enough to justify the price, but that's not the proper way to analyze MHP. Run your numbers based on lot rent alone and add a separate value for homes, but only if they're newer and in good condition.

Just because someone is willing to seller finance does not automatically mean a great opportunity for you. Don't let this distract you from the numbers and the deal itself!

And please, feel free to reach out anytime if you have other questions or just want to chat!