All Forum Posts by: Brandon Brown

I’ll be at SECO October 9-10.

Insurance

I used a heloc as a down payment on my first two commercial properties, it is a strategy used often.  Lenders don’t consider heloc funds as a they do other “credit” lines because it is your equity, so you absolutely would be able to use it as a down payment.  Most lenders do want to see your net worth is equal to or greater than the amount of the loan though. I wish you the best on your future investments.

Brandon 

@Mitchell Mcnall yeah I’ll just pay the minimum until I build my savings backup.  Then I’ll start throwing more at the principal.  

@Thomas Gardner thanks for the suggestions, I’ll see if the bank is on board with selling the homes.

@Taylor Chiu MSA is >800,00 and growing 

@Frank Geiger the bank wanted to have some collateral so they probably wouldn’t have done a personal loan. Not to mention my debt to income ratio probably would’ve supported a personal loan.  But my backup was an internet loan.

@Jason D.  it was the banks idea.  I simply filled out a loan application and gave them the park details, and that’s what they proposed.

@Dennis M. the mobile homes are personal property that are titled like vehicles, some the bank recommended that loan product, as the don’t finance “parks”.

@Jason D. they are titled like cars and the lien from the bank is like a car.

@Ryan Murdock the bank collateral is the land and homes.

@Frank Rolfe unfortunately the homes are part of the collateral pool so I can’t give them away.  I was thinking about some kind of rent to own agreement. any thoughts?

@Account Closed I found the deal on the mls.  But got it for a little over half the asking price because it had been on there for some time.

I used a local bank recommended by the broker.  I didn’t have a previous relationship with them.

Down payment was savings(15k) and a line of credit(~10k)

Hey BP, I am excited to share my creative finance story on this deal I just wrapped up.  So the mobile home park details are as follows:

Purchase price: $110K

13 homes, 2 lot rent and 11 park owned.(2 vacant units)

City water/septic 

Rent: $200-450

Auto Loan 20%down, 7.75% for 6 years full amortization.  

The payment is kinda high but I like the idea of having it paid off in 6 years.   This local bank proposed these terms and I accepted. It was by far the easiest loan process I’ve ever done.  So now I own 2 mobile home parks, a duplex, and my single family home.  The wheels are starting to spin faster and I’m building momentum.  Please respond with comments and questions.

Brandon

I just closed on a park.  As soon as I did I sent out letters notifying the tenants of the change.  In the next couple weeks I will sign new leases with them.

@Harrison Sharp I disagree cashing out your 401k is not the dumbest....if you employer has matched your contribution to a 401k the 30% tax isn’t that bad.  For example if you have contributed 50k and your employer matched 50k you’ve already made a 100% return.  Now you have 100k. And Uncle Sam takes 30k you still walk away with 70k. A 40%return, not even considering the gains or losses from the market. I will say if you’re not going to acquire a cash producing asset it is a dumb thing to do.

I guess asking this question on a real estate investment forum would yield those kind of responses. But anyway-

I’m currently about to go under contract for my primary home and it’s towards the top end of my budget.  My thinking behind it is great schools, new construction, happy wife and you know the rest.  But it depends where you are in life and what your goals are.  My wife and I already lived in a duplex so now we want a nice home that fits our growing family. After we close I will continue re investing with capital that I still have saved.  Yes I could get more units now if I went with a smaller home but that’s part of the reason I invest is to provide a better lifestyle for my family.