All Forum Posts by: Clint Morris

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This is the AS-IS deal. This would be my first MHP so my confidence level isn't terribly high with my analysis. I went and viewed the park yesterday.

A few details:

17 Lots have POH - 8 currently rented - Avg. Rent $425

8 Vacant lots - 7 TOH - Lot rent $135

City Electric

Well water - All testing passed for previous 2 years

Septic system - New pumps 1 year ago

Currently has homes on only one side of private road. Told current well/septic could handle 20-25 more pads

Comps POH are renting for $550, lots at $185-225.


This is obviously not a good deal as it currently states. A few of my concerns/questions:

Do the expenses seem realistic?

How do you figure in "potential" when working up an offer? There are 5 more POH that need minimal work to get them rented.

What do you think a fair price for this park is?

Thanks BP Community!

Would anybody else from the BP community mind taking a look at this and providing some feedback? Excited with the opportunity, but want to make sure I'm not missing anything.

Thanks in advance!

@Anna Catron thanks for the response.

I factored in maintenance for the unused acreage. There are about 3 lightly wooded acres that are kept like a park. The other is mainly pasture.

Driveway/road is gravel. It's in pretty good shape.

City water isn't a realistic option, which is a bit of a concern.

Haven't been able to get a straight answer on the motivation yet which is also throwing up a flag. They've only owned the park for four years. I think they'd be willing to negotiate, but I want to have some offer options for them. Population has been growing very slowly at less than 1% annually. There are solid employment opportunities within 15 minutes.

I appreciate the additional perspective and love to hear from anyone more seasoned in this area.

Filling the existing lots seems realistic, but adding 20 lots might be a little far fetched.

Hey All,

Looking to transition out of SFH and recently found an opportunity that I'd like to get the communities opinion on. Below are the details:

MHP-List Price $275K

20 Acres

25 Pads

17 Lots have POH - 8 currently rented - Avg. Rent $425

8 Vacant lots - 7 TOH - Lot rent $135

City Electric

Well water - All testing past for previous 2 years

Septic system - New pumps 1 year ago

Currently has homes on only one side of private road. Told current well/septic could handle 20-25 more pads

Comps POH are renting for $550, lots at $185-200.

As it currently operates with known expenses (taxes, insurance, licensing, testing, etc.) as well as POH Maintenance, PM, and other CAP EX, I'm showing it as a break even investment.

Would very much appreciate any additional insight the BP community is willing to share.

Thanks,

Clint

I've been approached by a potential buyer about purchasing one of my rental properties with a contract for deed arrangement. On the surface, it is a very good deal for me, but i am unfamiliar with contract for deed transactions and the pros/cons. Does anyone here have experience with contract for deeds that would share some advice? I may seek legal advice so any recommendations for Kansas would also be appreciated.

@Chris Mason Thanks for this information! I was unaware of this terminology but am glad you shared it so I am a little better prepared for future discussions. I will most definitely be referring to this checklist with my regular lender, although I know it won't change anything. Thank to everyone who helped me understand this situation better. I'm excited about the opportunities this community offers and hope to learn enough to pass some wisdom along in the future.

@Eric Dymesich Congrats and good luck on the adventure! I'm a little confused by the whole situation. I was sittting across the desk from the lender I've purchased my previous two houses from when she told me it would need to be commercial since it was not a primary residence. The other two I spoke with over the phone. There are a few other options locally I'll reach out to next week, otherwise I may be back next week asking the BP community for some alternate solutions.

@Salvatore Lentini thank you for your response and congrats on your success. I hope to be to that level someday. In regards to the mortgages, the banks shut down the option immediately after I responded "no" to their "is this for your primary residence" question. This is what caught me off guard. I have excellent credit, a DTI of less than 25%, and a well paying job at a business I've been at for over 5 years. I assumed (wrongly) that acquiring financing for a $40k mortgage would be a non-issue. I'm going to keep looking around locally, but wanted to make sure I haven't been misunderstanding the process the whole time since this is the first time I've purchased a property going into it knowing it wasn't going to at least temporarily be my primary residence.

@Harjeet Bhatti Thank you for the response. Have you ever heard of banks having in-house policies limiting mortgage opportunities to only primary residences? 

I would like to avoid a commercial loan at this stage, especially for a SFH. If they are unwilling to consider offering mortgages for investment property should I look to a larger mortgage company or look for more creative financing options?

I'm relatively new to RE, but have recently made up my mind that it's going to be one of the main components to my long term wealth building strategy. I've been practicing by analyzing potential deals in my area and found one that fits my immediate criteria for cash flow. I visited the property and confirmed that it is a profitable opportunity. My next step was to confirm financing by talking with local banks. All of the local banks are telling me that any financing options available would only be for a variable rate commercial loans. My assumption was that I could get AT LEAST four conventional mortgages without having to consider commercial financing. Was I off base here? Any advice on options of how to move forward from here would be much appreciated. Thanks in advance!