cash purchase, then refinance on mobile home that has space rent?

[Antony Nguyen]

Hi Everyone ,

I am wondering what the likelihood of getting a conventional cash-out refinance loan on a mobile home (manufactured home) would be if I purchased it with cash. The sticking point is that the mobile homes I'm looking at all have space rents, ie, I wouldn't own the land and would have to pay a monthly land lease fee (which I can afford fine). The location is the Central Coast of California. What generally is the availability of conventional loans for this type of property? 

My intention is to find a mobile home that I can purchase with cash at around 25% below market-value. An example would be a $100K Zestimate property that I would purchase for $75K cash. My hope would be that I can refinance this and pull out all or most of my $75K - I don't care about extra cash out, though it would be nice of course. I would then use the tenant rental payment to pay the mortgage and land lease, and perhaps get a tiny bit of positive cash flow.

I myself don't own any property yet (I am a newbie interested in commercial properties), but I have some capital and a very good credit score.  I live in Los Angeles, so this would be an in-state investment.

For a little background, which is probably not relevant but I'll disclose anyway:

I am in the process of helping my father move into a smaller place. He lives off of fixed Social Security payments and has virtually no equity in a house with a $500K loan balance that he refinanced 10 years ago using an adjustable rate loan. My own mini CMA shows that we would be somewhat fortunate to sell this house for more than the mortgage balance + realtor fees. His SS payments will drop by 20% one year from now as my younger brother will be turning 18, losing the dependent benefit, and he will have a very tough time making ends meet with the current mortgage payment.

I would like to move him into a much smaller home that his SS would cover and still leave him with some living cash, while at the same time providing me with some tax benefit.

If anyone's went through a similar experience in helping their parents, I would love to chat with you!