All Forum Posts by: Colby Wise

I was recently listening to a great MHU talk from Abraham Anderson "0-100 lots..." who brought up the concept of seller second lien financing, but I am unfamiliar with how cash e.g. downpayment, is exchanged at closing (and escrow). Can someone please walk me through the process in detail? 

For example, let's say a private lender accepts second liens with the first lien being at 75% LTV. Normally on a $1,000,000 park the downpayment would be $250,000. Now if the seller carries $125,000 what are the steps of this transaction?

Clarity on this would be quite helpful as looking at a number of parks and I'd like to aim for a bigger park but has short-term (< 6 mths) liquidity shortfall and prefer not to sell assets or raise from friends/family. This could be a great tool for arsenal!  

Hey Tom, I actually found several good tools that have been helpful to build listing scrapers and first pass automated msa/county/city/zip analyzers. Ping me - happy to share findings. Best if you have some coding background 

Hi Adrian,

A couple of preliminary questions come to mind in order to better understand this park. Namely you want to assess the stability of the park in terms of resident demand, lot rent, POH rents, etc. 

Q1. Is $500 lot rent, park owned home rent, or combination? 

Some listings will say "average" but it's important break these out to understand park dynamics

Q2. What is the lot rent and POH rent at comparable parks (quality, amenities, and size)?

This is a very direct and crucial step in due diligence. Your rents in most cases will be determined by local demand/prices

Q3. What rents do 2br & 3br rents at apartments in the area rent for?

If your lot rent is $500 for say a double wide but 2br apartments are similar, your residents may have a logical preference for an apartment. Good rule of thumb is to find parks where local apartment rents are greater than 2x your rent. This supports the "affordable" housing argument. 

Q4. What is the median home price in this metro area, county, city, zip?

With rates super low the argument can be made that if median home prices are in the $100-125k range, if a resident can afford a government mortgage program e.g FHA with ~4% down than a mortgage on house would compete with your park demand

@Aaron K.

Thanks for the feedback. I was trying to save myself some coding but looks like I'll have to spend a week building it :/. Accuracy is not a problem since it's a simple filter and with enough sources I can mathematically account for the error rate. 

Hi does anyone know of a free API or other data source that will help me programmatically extract city or zip code level rent estimates? A small lag in data is totally fine since I am doing medium-term analysis

Hi @Daniel Ryu or @Joshua Schoer - can you also send me a list of MHP lenders willing to do smaller loans! 

Awesome story and congrats! I've been educating myself on the MHP environment in Arizona and MF but focused on acquiring a park in 2020. Would you be open to sharing some wisdom on your MHP experience? 

Hi Joyce,

+1 As I would love to hear from other more experienced investors as I'm a newbie and still learning about the Phoenix market with a plan of investing in a 8+ unit later this year!

However from my research I've learned many investors suggest calling 3-5 contractors and requesting clear quotes. 3 people could give you a good expected range, however 5 may let you throw out the outliers at the top and bottom (really cheap), then choose from the rest after calling and checking references!