All Forum Posts by: Ali Kassam

I'm interested to hear from anyone who has recently built a MHP to get an idea of cost/site.  I've read currently it's between $15-18k/site not including the cost of land.

 I live in an air force town of about 40,000 people and there's a big shortage of quality homes, especially for airmen.  The city is also very favorable to mobile homes as there are a number of parks.  I bought an established park and paid less than 20k/lot and that includes the trailer.  

The land is 32 acres flat and cleared and city water/sewer is at the property boundary.  Id want to put 100 lots on maybe 15 of the acres.  

Hi BP,

i own a mobile home park in New Mexico.  I fully renovated the first trailer using my own funds, and now the unit looks like a brand new home (ultra modern).  

I'd like to be able to keep the trailer as a rental, but I'm not sure if I can get a loan against a mobile home that's not on a permanent foundation.  The home can rent for anywhere between 1000-1200/mo.  

can I get a loan strictly against the rent?  What about the high debt service ratio? 

@Elizabeth the lot rent would be $350, but again I would own the trailer and the lot.  Also the 17 vacants all have trailers on them.  Surely they have some intrinsic value that has to be factored into the equation.  

Wow I can't believe so many people responded overnight.  

the purchase price is 800k and remember all homes are park owned homes.  The average rent on the 24 units rented is $512/mo and then the tenants pay their own electric.  Not accounting for delinquency that's $12,288/mo or $147,456/yr.  

for those wondering the market rent on a 3/2 mobile in the area is between $650-$700.  For a 2/2 it's $550-575

@tim it's an off market deal

I'm under contract to purchase a 41 unit POH MHP and a 24 machine laundromat.  24 of the units are currently rented.  When I originally met with the owner, it was obvious that he wasn't going to have great records.  Most of his record keeping was all paper files.  As I've been doing my due diligence, I can't tell if this is just a matter of the owner practicing poor accounting principles, or if I should run away from this deal.  I've been to the property and can verify the occupancy.  

Red Flags

1. The rent roll totals to about $144k/yr, but on his 2020 tax return he only shows $70k worth of rent collected.  This same thing applies to 2019.
2. His profit/loss on his returns for 2020 and 2019 both show a 25k loss with over $100k in expenses
3. It's a coin operated laundry, but the 2019 and 2020 taxes don't show any laundry income
4. The laundromat has been closed for the last 9 months supposedly, but it has 0 reviews online.  In comparison, the laundromat 1 mile away has 31 reviews on Google. 
5. Every lease states rent is due on the 1st of the month.  When I asked for proof of deposit for December rent roughly $4k was deposited on Dec. 7th and $8k was deposited on Dec. 17th.  

Is it that out of the ordinary for an owner to under report 50-75% of their income?  Would that be a huge deal breaker, or just cause for concern?  

I look at this deal as a big value add opportunity by renovating the 17 vacants, so if this is just bad accounting, I'm confident I can turn the property around.  

Thank you @jack martin for that insight.  I was under the impression that if I went with an institutional lender like a credit union or local bank, that they would just put me in a long term loan to begin with.  My impression was only a hard money lender would have a short balloon term.  

i definitely would not want a short balloon term with the current uncertainty.  

Thanks everyone for their feedback.  I have reached out to a number of local banks and it seems like I should be able to get financing with 20-25% down with a 20 year amortization.  Will keep everyone posted.  

I'm under contract to buy a 41 unit park owned MHP in New Mexico.  Almost everyone I've spoken to so far says they either don't finance MHP's or that the sales price is too small for them to finance.  Where are people going to finance MHP's?  Hard money lenders? Community banks?

I don't own a park that's half and half but I'm living in my RV in a mobile home and RV park that has over 300 spots.  There is a combination of RV's and Mobile homes.  The park charges the same lot rent for tenant owned homes and for RV's.  I think adding RV hookups would be a great way to quickly fill the vacancies in your park, and retroactively adding RV hookups should be pretty cheap since you already have all the connections to the lot already.