Portfolio to avoid carrying the note? - MHP

[Charlotte Dunford]

I understand that it might be tough to sell a small park outright without me carrying the note, for example 10-20 lots. Would it be more likely to sell outright if I were to bundle up many parks with a total of 50 units as a portfolio sale? Is there a buyer's pool for portfolio sales for MHP? Thank you in advance!

[Frank Rolfe]

The answer is ... maybe. It's not really a matter of the number of lots, but really the NOI of the deal. The hardest area of lending in the mobile home park business are loans under $500,000. These only have two options: 1) seller financing and 2) banks. Many sellers just go straight to seller financing to get 5% vs. 2% in CDs, so it's a win/win. If you are wanting to sell without seller financing, you will need to build an asset that is "bankable" which means good location in a metro of at least 100,000 or so, city water and sewer preferably, few park-owned homes, clean survey and title, and a price that makes it worth a bank's time to create the loan. If you can bundle several small deals together, it may get one bank's attention better, but it may have no impact on other banks -- it's a matter of preference.