All Forum Posts by: Brian Borchers

Ken,

Thank you for the quick reply, I'll work on my vision...:)

With respect to your answer from #1 (and I'm consulting the State MHA and legal counsel FYI), assuming I'm comfortable with the financial cost of doing this is my best bet to immediately try to finalize the purchase of any of the RTO units? I'm building this in to the price I'm going to offer, but a $2k-$3k hit per unit is most likely worth escaping any liability. Especially if I can raise the lot rent and recapture that revenue.

Thanks again for all of your advice.

Brian

Bryan,

Per my other thread, what is the best say to sell off the POH? I'm assuming that most of the tenants can't do it without seller financing that is now illegal / too complicated.

Thanks

Brian

Ok, one of the purchases that I'm considering seems to be a bit overpriced, but I want to make sure I'm calculating my numbers correctly.

This part has 49 lots with the following breakdown - 31 tenant owned, 15 POH, 3 empty lots.

That looks like the following:

Lot Rent = $235 * 31 * 12 = $87,780 * 70% = $61,194 * 10 = $611,940

POH ($267 ave. extra rent) = $267 * .5 = $133.50 * 12 = $1,602 * 15 = $24,030 * 10 = $240, 300

Total = $611,940 + $240,300 = $852,240

According to the sellers numbers, the NOI average over the past 4 years is ~$91,000.

Tenants pay for trash, electric and gas. Water and sewer are sub-metered, but not charged back. City maintains streets and lights. Water and sewer average about 30% of total expenses.

Rents are slightly below market.

Seller wants $970,000.

I'm sure I have forgotten something, but that should be enough to get everyone started.

Hello all,

Hopefully I didn't miss this when performing a search, but I've read over everything I can find on seller financing and it looks like it will now be more difficult than ever to sell the POH on any purchase.

I do have two thoughts on the matter though and hopefully someone with more experience can tell me if I am wasting my time. I'm investigating the purchase of two parks and wanted to see if if anyone knows the answers to these potential issues.

1. Purchasing a park with RTO contracts already in place. - Does anyone know if it is legal to finish out these agreements since they were done under prior ownership? If it isn't legal then I can imagine all kinds of issues with the tenants who thought they were buying their unit.

2. On a property where the units might not be worth that much for resale, if you sell a unit for a nominal amount (say $750) first, can you then legally sign a person to a longer term lease to the park? Assuming they are month to month, you could start a new agreement the following month to cover the additional cost of the unit at say $100 extra lot rent. Obviously there is risk here and you would have to discuss it with the tenant first, but this seems like a win-win situation if it is legal. They would be the legal owner of the unit and I'm within my rights as the property owner to increase their rent within the guidelines of my state, correct?

3. I've heard multiple people refer to seller financing deals over one year as the thing that triggers the compliance issues. Does this mean you can do RTO if it is only for a year? Obviously quite a few issues here and maybe I have misunderstood what people have been saying about the year timeframe.

Thanks for the help and the great forum.