All Forum Posts by: Chris Ashley

Hi,

I recently purchased a MHP which came with 3 vacant trailers I own. The trailers are in decent shape and ready to rent. I was initially going to rent the trailers, however, I've been approached by several people wanting to rent-to-own. The terms I'd sell trailers for would be a similar monthly rent-to-own payment as what I would collect by just renting trailer-the difference being with rent to own they'd be invested in trailer, own it eventually at which time I would loss some monthly income and only collet lot rent. Long term I'd prefer to have stable tenants who own trailers with less turnover. rent to own would also take care of repairs and maintenance.

Example terms for rent to own 1983 Redman 14X70. purchase price of $21,000. Monthly payment of $625 ($350 toward trailer, $275 toward lot rent) for 60 months.

It would be great to hear others perspectives? What are the pros and cons? What am I missing?

Best regards,

Chris- 

Hi Rob, thanks for the info.

I wasn't thinking about potential for costly trash fees-thanks

Good tip on eviction process. What happens if the occupant your evicting doesn't own trailer, what happens to trailer? Does the bank or person who owns trailer pay for lot rent as they try to find someone new to buy there trailer, move it or sell?

I called town supervisor and got the inside story. He said it has had a few issues, normal stuff that was resolved quickly and other than that it was good park.

Thanks,

Chris-

NaDean, I called town supervisor after reading your post. He said park is grandfathered in and I'd be fine bringing in any new trailers-just need to do quick building permit and pay $75 fee, no board or member approval needed. 1996 and older trailers would need to be HUD certified.

3 of current vacancy's are older trailers that come with deal. they need some rehad but I plan on renting them out to make additional money.

Park comes with a maintenance man who's been with the Park for 10 years. He does rent collections, snow/lawn and light maintenance.

thanks for your input.

Chris-

Good insight Kevin, thank you. After reading your post I contacted a local septic company. They said they'd do an inspection for 100 dollars for first hour and 65 after that. Seems reasonable price to pay for peace of mind.

thanks again,

Chris-

Hi Jeffrey H, thanks for the post.

I've negotiated this deal directly with bank willing to finance loan. Bank is familiar with property having held the paper on Park and close business relationship with previous owner for 15yrs. Further, I have good credit, assets and could budget to pay for park out of personal W2 income with renting no untis. there a small local bank and happy to give me some money.

Could you elaborate on your reasoning to why this would be a bad deal? Walk me through your calculations? I'd be very grateful as this is my first MHP and I'm learning. I've purchased other Multi unit properties but MHP seem to be a new animal.

thanks,

Chris-

Hi, 

Recently my offer was accepted on a 22 unit MHP . It's taken a long time. Park owner filed bankruptcy, he's been out of picture and i've been negotiating directly with bank. When owner left town he didn't leave any financial/tax records so I've had to do some leg work/investigating to ascertain financials. I've done this by talking with current property mgt. Co. and knocking on doors of MHP with my realtor? Current PM of 10 yrs has been very helpful as he'd like to stay on for new owner (me) and i believe he's been honest with current scenario and showed me rent roll collecting for bank. My real estate broker has been very helpful as well, he owns several parks of his own and is well respected in community-he came highly recommended for MHP investing. He says this is a steal. However, i was hoping to get some additional perspective as it can't hurt, I don't want to miss anything.

here's offer bank accepted:

250K purchase w/ 20% down. I have a good financial profile and excellent credit. I haven't discussed additional terms with bank (interest rate, term, fees, etc.)

1. I don't want to get a bad deal on the back end of this deal with financing. Any watch outs, pitfalls and general guidelines when negotiating with bank for MHP loan? Acceptable terms, rates, interest rates, etc-any advice? As i don't have previous years tax returns for park, it limits my options and that's why i'm talking with bank that owns current mortgage as they are willing to be flexible and motivated by current owners bankruptcy. 

About the park:

22 units total.

15 rented and paying at $275 mo. lot rent. All long term tenants. (15X$275=$4,125 mo.)

1 vacant pad (needs trailer)

2 delinquent tenants

PM says one needs to be evicted and other always pays when he gets taxes back for last 9 yrs but I'm counting that as a vacancy

1 lot that has newer century 21 trailer on it for sale that's not paying lot rent

How does this work, how do i get this company to pay lot rent?

3 lots with vacant trailers that come with sale (2 of which need serious rehab)

with rehab, PM says i should get $600 a mo. per owned trailer

Would you keep ownership of trailers or sell trailers and only collect lot rent?

Considering purchase price of $250 w/ 20% down-assuming 15yr at 5% loan-Is this a good deal at where MHP park sits today with vacancy's?

Expenses paid by landlord (bookkeeping, taxes, PM fee, snow/lawn, utilities, maint., insurance, water/sewer)=$17,355 annually. numbers provided by PM. Public water. Septic systems. tenants pay own trash and water. Am i missing expenses or should i add in $ for potential additional costs, what are they?

of note, I have an old appraisal from 11/2013 of $375 but this is when park was fully rented. i've been told vacancy increased over last 18months due to owner leaving.

The good, the bad and the ugly? What should i be looking out for? What am i missing? Thank you all in advance for your considerations and time.

Best regards, 

Chris-