Strategies for Tapping Equity in MHPs

[Bryan Richard]

We purchased three smaller parks last year for roughly $425K. 

We put a ton of work into maximizing the upside and improving the distressed properties and have managed to get annual NOI up to $90K. At a conservative 12% cap rate, these parks would have a valuation of around $750K if I were to put them up for sale.

We'll be floorplanning the parks this spring, which I believe can add another $70K to the top line. 

The outstanding notes on the parks are $275K. Which would put our equity at: 
* $150K at the purchase price
* $475K at the 12% cap rate valuation

Short of selling the parks, what, if any, are our options for tapping this equity? I've talked to a couple of the big banks and they're not interested in touching them (which didn't surprise me). 

Second question: Has anyone had success in refinancing a MHP note? 

[Jack Martin]

@Bryan Richard you will find it difficult to get a large bank's attention, not because they don't like MHPs, but simply because the niche is so narrow they don't want to commit the bandwidth to the asset class.  (so keep that in mind as you consider financing) The best banks to approach will be local or regional banks, and particularly those who love MHPs. You can find out which banks have a strong appetite for parks by asking the MH/RV brokers in your area, networking through other owners of parks in your area, or simply obtain list of the smaller banks in your area and just calling them to see if they are bullish on parks. When you find a couple banks that are interested, you will usually find them to be helpful in guiding you as it relates to how to demonstrate the performance of the park to them correctly.  

BTW, if your parks are in the SW, shoot me a PM and I can share a regional bank that will likely be a good fit for you.