Mobile home park Financing

[Ruthanne Thornton]

I have found a 5 trailer mobile home park in Georgia. Its an hour from where I live. Seller is asking for $199,900. She will not seller finance or owner finance. She told me she is selling because she just bought apartments in Anderson SC (400 doors) and wont have time to manage the park anymore. All 5 lots are rented. All trailers are very well taken care of. Gross monthly rental income is $2925 annual is $35,100. 100% occupied. There is also room for 1 more trailer. My problem is I can not find a local bank that will finance a mobile home park. I also do not have 20% down payment. Any creative suggestions? 

[Frank Rolfe]

It's a good thing you can't find a bank because that is a terrible deal. You are analyzing this deal incorrectly. Mobile home parks only have the land rental (real property) income to consider NOT the mobile home income. Assuming the lot rent is $200 per month, that would make the property only worth $200 x 5 x 12 x 50% = $6,000 net income which, at a 10% cap rate, is worth around $60,000. But even then, that's assuming the property is 100% perfect and needs no cap-x. 

This seller is trying to sell the mobile home park as a "detached apartment building" which sounds good in theory but no bank is going to agree with it if they know what they're doing. Mobile homes are "personal property" and not "real property" so their income does not count to the bank.  

If you want to buy a 5 unit apartment complex for $199,000, then you can find a bank for it, but you MUST use only the LOT RENT in all future calculations on mobile home parks.

Just trying to keep you out of trouble.