Need to get some education on this asset

[Jesse Proett]

Some things that worry me about mobile home parks:

Will you have multiple buyers when it’s time to sell?

If and when you sell, will it need to be owner financing?

Owner financing is great for when you buy an asset, but not so great deal for the seller. I would prefer to move my profits to the next property.

Can you get agency (Fannie Mae or Freddie Mac) non-recourse debt?

Bank loans would put my personal assets at risk in case of a default.

Can you cash out refinance?

This is a great way to extract equity, but I don’t see how you could do that with owner financing.

If these are already answered in the forums, I apologize in advance for not taking the time and searching the answers.

[Will Fraser]

Hi @Jesse Proett, I am an observer of mobile home investing only and by no mean a sage here, so I'll share from my limited insight into a friend of mine who owns a 16-pad MH property.

You will have a tough time finding lenders for a MH park. Like most businesses, though, the strength of the business (and the strength of the operator) will determine the willingness of lenders to lend. You will NOT likely find agency debt available on this asset class (which is one of the reasons it still has a relatively high ROI and has not been bought up by the institutional investors). In theory you could cash out, but first you'll need to identify a bank who is fine holding a MH park as collateral for real cash they are going to hand you.

All in all I've seen some local banks be amenable to MH parks, and others flee from it.  It's hard to imagine regional or national banks being interested unless the operator and business model are airtight.  So, I'd start with the lender in mind and work everything backwards off of that.