All Forum Posts by: Blake Ramsden

Thanks for sharing your experience in this Craig. Good to know it hasn’t been for lack of effort on my part in finding a lender for this. 

I’ve decided to bite the bullet and build a house on the land to more easily access the equity. Not my first choice as I was wanting to keep my debt and tax burden lower on my primary residence but I think it’s my best option long term to take advantage of the low rates while they last. 

This seems like a reasonable idea to me. Wouldn't be that difficult to retrofit a foundation like a pier and beam home if the mobile home is in decent shape to begin with. As mentioned in a case like mine it would make sense, at least as a lower budget/lower property tax valuation option, given the land value and the cost to build new now.

To pass on some useful information I received for anyone else researching this topic this is the below info I received on my specific situation. Sounds like if I had a double wide I may have had more options.

"The main limiting factor is that your primary residence is a singlewide. Fannie and Freddie (the two Conventional loan programs) only allow singlewides in very limited circumstances, and they are expressly prohibited when doing Cashout Refinance. You also cannot do a Cashout Refinance in Texas through FHA, which would allow a singlewide.
You may be able to accomplish the majority of what you're looking to do through a Construction loan (pay off land loan, fence, generator, well house, potentially even some renovations to the mobile homes if listed as Accessory Dwelling Units), but you mentioned not being ready to make the move on new construction on the property yet.
It may also work as an FHA 203k Renovation loan, but these can be extremely cumbersome and expensive to close. Again, it wouldn't check all your boxes but the majority.
My advice is to search out a local credit union in the area, where you can explain the situation and your goals. They may have a portfolio product or land loan product that would fit your needs."

So to sum it up the mobile home being a single wide and the fact that I'm looking for a cash out refinance vs a simple refinance are the two main confounding factors for the off the shelf options. Still haven't found a local bank or credit union that has one of these mythical bespoke loans, perhaps I've just spoken to inexperienced personnel who aren't aware of them either.

That's exactly why I don't quite understand in this case. Seems to me the $315,000 in equity if I never made a single payment (worst case scenario) would be compensation enough for having two mobile homes removed and a single individual (me) to evict. Compound that with my near perfect credit, low dti %, stabil/high income career I've been in for 3+ years, I'd have to be insane to default on this property in this area. What I could understand is if I had poor credit and less equity or was trying to finance something like 80% ltv. 

I was just hopeful someone knew of a bank that might consider my specific situation instead of seeing "mobile home" and instantly thinking it was a bad loan.

Appreciate the suggestions.

Hey Mike,

That's correct, I'm not trying to get a loan on the mobile homes. They're owned free and clear and they're not worth a whole lot anyway. Other than the fact they provide me with a place to live and the other is a source of income. 

I'm trying to pull equity out of the land in spite of the mobile homes being on the property. That's why my appraisal was land value only. Seems like banks are more than willing to lend on vacant land but for some reason a mobile home makes a 30-40% LTV land loan unthinkable?

I actually am in talks with Prosperity Bank in NB and have gotten further with them than any other bank but I'm still not sure that it's going to be approved. Waiting to hear back from the underwriting manager to see if we can make it work somehow. 

Just seems illogical to me that it's so difficult to find a loan for this situation. I get that mobile homes tend to be depreciating assets but they certainly don't have negative value. If the land value can stand on its own I just can't understand the risk, in the end that's all it boils down to for a bank.

Thanks Kevin,

I'll continue my search, I was just hoping to catch a break if someone in the BP community knew of a specific lender to save me some time shooting in the dark. Bruce sent me a couple contacts I'm going to try.

I may have to pivot strategy and sell the 2/1 mobile I was renting and build a small single family home in its stead. Like a 600SF AirBnB rental in its place just to qualify for a traditional mortgage. The plan is to have multiple small AirBnB's out here eventually adding over time.

 

Sub 5%

Good afternoon everyone,

I'm looking to do a cash out refinance on my 15 acre property that currently has two mobile homes on it. I occupy one as my primary residence and the other is a rental, this is my only property. My intent is to pull out some of the significant equity I have in order to fund my next investment. I've run into difficulty finding a lender that will do a cash-out refi due to the mobile homes and was hoping to tap into the BP pool of resources, if any of you know of or have used a lender that I can contact for this unique type of loan. 

From my experience so far the mobile homes are the kicker, they're like kryptonite to banks for some reason. I have excellent credit (800+), excellent DTI, stable work history, and plenty of equity and am only asking for a 30% LTV cash out. I have been through 10+ banks/credit unions that tell me they can't help me.

Property was appraised at 450k (not including value of structures), currently owe 63k on an AG land loan with a 4.65% rate. Would like to refinance for 135k, possibly more depending on the available terms/rates. 

Appreciate any suggestions or contacts!

Hey there Bigger Pockets!

Been a long time listener and reader on the site, hoping to tap into the collective intellect and experience of the group and gain some outsider insight to my plans for my property and investment strategy and make sure I'm not overlooking something crucial or if my plan is viable in general. The exemption questions may be a bit niche since they usually don't apply to rentals or flips so any related insight or resources are appreciated.

So an overview of my current situation and strategy. I have 15 unrestricted acres in Hays County TX with a 2 acre homestead that I've been "house hacking" for years. 15 minutes from Tx State University, Two mobile homes (3/2 & 2/1) the 2/1 has been a steady rental that is recently vacant and I'm taking the opportunity to renovate. The 3/2 I 've been steadily updating as I've been living in it and plan to rent it out and switch over and live in the 2/1. Also have a 500SF single bed/bath MIL suite outbuilding I've been using as a gym that could also be rented. I intend to complete a barndomium style home for myself within the next year and then rent the 2/1 out once again. I've also toyed with the idea of building 2-3 off grid style "tiny home" airbnb's or long term rentals, if the interest is there, spaced out to maintain reasonable privacy on the land. I also plan to keep this property for the foreseeable future as my home base (Hence the interest in lowering the taxes). I also have a large amount of equity I plan to use as a piggy bank for my future investments.

The idea with the Barndo is to have a small living quarters with a large shop space to secure and hold my gym equipment, tools, trailer, building supplies etc I've been accumulating over the years for renovations and provide myself with a cash flowing home base to to work from through renting the other structures. My 2 year goal is to find distressed single family and duplex properties for flip and hold using the BRRRR strategy. 2-3 per year.

Property values have been rising substantially year over year (great for my equity!) and I assume they will continue to do so in this area so I want to try and lessen my property tax burden, if I can, and get the 5 year documentation period started now. This years taxes topped 4k and seem to be increasing 800-1000 each year now and the area and roads around me are developing quite fast. Some Neighbors with more developed properties are already paying 7-10k.

My method of obtaining the exemption is to use a local turn-key beekeeping service for the next 5 years to qualify for 1-d-1 open space apiary AG exemption and after 5 years holding the designation for a year then apply for a wildlife exemption and discontinue the beekeeping services. This turn-key service is for them to maintain and provide the hives and provide the proper documentation and broker the exemption with the tax assessor. After reading through their contract documents this service equates to roughly a $16.5K expense over that 6 year period before I'm able to switch over to wildlife and gives an estimated payback period in tax savings of less than 5 years even at current property values given the generic +-90% discount to land value assessed provided by AG exemption. I also wonder if the beekeeping fees are tax deductible in some way? Random thought I haven't considered until just now, probably not.

This seemed like a no brainer at face value but in doing my due diligence I'm worried there may be some conflicts with this strategy.

So one issue I'm concerned about now after reading another forum post is if I have rental income coming from the property does this run the risk of rejecting my ag exemption? Seems they wouldn't be related or could coexist. Link to thread mentioning such a possibility here https://www.biggerpockets.com/...  response from Roy. The discussion was horse boarding but in mentioning if rental income superseded the boarding income it would void the AG eligibility raises questions about multi-use. AG exemption should be only tied to the property/property use and not the structures on it I thought. Why would rental income effect this? Should the county tax assessor even be privy to your tax returns to be aware of rental income? It's no where on the application form. Would be a pretty big bummer to spend 16K and 5 years only to be denied.

The ultimate goal of course is the wildlife exemption which can be cheaply maintained and passed on with the eventual sale of the property without incurring "rollback" taxes for change of use and also should not conflict with rental income from the property. I plan to try and bring some of these questions to the county tax assessors office but wanted to have multiple sources weigh in and also get any input or tips on my other strategies with the property. 

Any questions or additional info needed please ask, I'm already pretty long winded here but am looking forward to any input. Some figures below if you're curious.

Expenses: Mortgage -$898.00 Roughly $65k remaining - Current property market value estimated $450k taxes assessed on $256k

Property tax 2020 - -$4,165.00 ; Utilities- Only electric average -$100 per month (separate meters on trailers) I have Well for water and I don't pay for garbage and recycling.

Income: 2/1 income previously $900/mo, after reno anticipating $1,150 : 3/2 projected income $1,400/mo : 1/1 MIL Suite 550/mo.

Future expenses: Barndo construction loan 200k - if rolled into 3% 15/yr estimated mortgage $1,381/mo. - Property market value estimated $650-700k

Haven't run the numbers on tiny home construction costs. Likely 20-30k returning 550-650 per month rough estimates.