All Forum Posts by: Bryan Richard

@Aaron Smith Good to know. Have you used the program in the past for new homes? 

@James Park Yeah, the qualification vetting seemed pretty through. 

I'm counting that we can pay roughly $32K for trailers that we can then rent for $700-750/month. This is in parks where the rent ranges from $425-550. Given our demand when we have vacancies, I think we'll be able to rent them out. 

For our New Mexico park I'm not sure I would put new units in because I can buy 10 used units this afternoon. Used trailer are everywhere in New Mexico. 

That said, I have mixed feelings about used trailers. We spent a LOT of money last year rehabbing used trailers and I really have soured on maintaining them. I figure you either have to pay it on the front or on the back; choose your poison. 

@James Park I would reach out to https://www.21stcommunitylending.com/ and inquire about their CASH program. 

It's a financing program for park owners where they lend you the money to purchase new homes from the manufacturer (you have to get a dealer's license for your state). They pay the shipping fee; you pay for setup and installation. 

They waive payments for the first year for you to get tenants into the homes. Following that the tenant can take over the mortgage and pay you lot rent or you pay off the mortgage and pass it through to the tenants. From my conversations with them they seem to prefer the latter option. 

I learned about this when I was looking to add units to our Iowa parks. There are ZERO used homes for sale in Iowa that can be relocated to a new park so I kind of know what you're going through. I too have thought about trucking used homes from out of state as a stopgap.  

We're not 100% sure we're going to use them for adding units to our Iowa parks and are still doing research. But, so far, I like what I see. 

@Karen Schimpf This is a little out of my wheelhouse. What type of alternative loan product could we potentially get with this asset class? 

@Jack Martin @Andy Bauman Thanks, guys. I've been talking to local banks in SE Iowa. Not much luck so far, it's not the easiest sell regardless if these parks print money or not. 

@Robert Wiltshire It's the term for adding new homes to vacant lots. 

We purchased three smaller parks last year for roughly $425K. 

We put a ton of work into maximizing the upside and improving the distressed properties and have managed to get annual NOI up to $90K. At a conservative 12% cap rate, these parks would have a valuation of around $750K if I were to put them up for sale.

We'll be floorplanning the parks this spring, which I believe can add another $70K to the top line. 

The outstanding notes on the parks are $275K. Which would put our equity at: 
* $150K at the purchase price
* $475K at the 12% cap rate valuation

Short of selling the parks, what, if any, are our options for tapping this equity? I've talked to a couple of the big banks and they're not interested in touching them (which didn't surprise me). 

Second question: Has anyone had success in refinancing a MHP note?