Seller Financed Cross Collaterlized Agreement

[Logan M.]

Investment Info:

Large multi-family (5+ units) buy & hold investment.

Purchase price: $541,000

Consisting of six units, each is a park-owned home. The property is located in a desirable location. The purchase price for this property was $541,000. It generates a monthly cash flow of $4,600.

What made you interested in investing in this type of deal?

Zero down purchase utilizing the equity in another home with a second position lien without a monthly payment.

How did you find this deal and how did you negotiate it?

This was on our local MLS but what really happened was I was buying another MHP from this owner and told him "Why don't you just sell me both", and he did.

How did you finance this deal?

Zero down purchase utilizing the equity in another home with a second position lien without a monthly payment. 5-year term. Interest-only payments at 6%.

How did you add value to the deal?

This was one of the more difficult properties to add value but I have two options. 1. Increase rents or 2. Sell the homes to tenants. We are running into some obstacles but one unit was rerented from $600/month to now $1200/month.

What was the outcome?

Work in progress but we cash flowed at purchase.

Lessons learned? Challenges?

Check the condition of each home before making the purchase.

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

I represented myself.