All Forum Posts by: Cody Steck

I own a very small 5 unit mobile home park where 2 of the homes are owned by the tenants, and I own the other 3. I am planning on selling two of the units on owner financing here shortly, but need to get more familiar with what to expect on a few things.

1) How does this affect income taxes? Is it any different than just collecting rent? (I've been a buyer on numerous seller finance deals but never held a note myself before)
2) If I decide to sell the underlying property, I assume that the note would be negotiable and could be included/excluded from that sale? Anything to look out for here? 

3) The value of the property would drop substantially once the homes are moved from home rent+lot rent, to just the lot rent, what do I need to look out for here? I guess my main concern is that I shoot myself in the foot long term because the NOI drops substantially and no longer justifies a high enough price to offset the amount I collected on the note.

Appreciate any advice/guidance from anybody who's done this at least 1 more time than myself.

I bought a 5 unit mobile home park in a smaller town about 3 hours from where I live. The numbers on the deal are pretty good, and I was able to take it down on seller financing/private money with no cash out of pocket. 

However, now that I've raised rents slightly and stabilized the property, I am having difficulty finding a lender who will lend on something like this. I've checked with broker's (found one loan product, but at 10% interest on 5 year ARM), I've checked with big and small credit unions including local credit unions and none of them will touch something like this, even on a portfolio loan product. I tried an SBA loan, but they will not finance it because the property has long term leases, and not short term.

I guess at this point, I am looking for private capital, or for a credit union/bank/lender outside of my area that will be able to secure long term financing. Ideal loan amount is ~$275,000. Who's got resources? 

Hey Christina! Congrats on your decision to invest here in Utah! I work with a lot of out of state buyers and investors and have a few PM contacts - I'll send them over to you. 

I would focus on building up your savings and increasing your income first. This will make it much easier and "safer" to actually purchase that eventual home. Yes, you may have to pay more in 6, 12, or 18 months, but from what little info you shared, it sounds like you'll be in a better overall financial position. You can always continue to learn, watch, and expand your network within the business.

I believe Utah's market will remain strong for at least the next 18 months, anything beyond that is too hard to predict. The only thing I see slowing this market down is an increase in rates, or if builders figure out a way to double or triple the rate at which they can build. 

Stick around here on BP and you will learn A TON!

Masyn, congratulations on your decision to house hack, as well as graduating. I have house hacked (still doing it) 4 times now, and it's changed my life beyond what I could imagine. I'm happy to connect and help out any way that I can, even if you just need another perspective from my experience.

Hey Lukas, congrats on your decision to find something to house hack! I imagine you are looking for a duplex, or something with a mother-in-law (rather than having roommates) which is just fine and can be done. To be honest, I think you are going to be looking in the 350-400k range to get into something like this that will work for a good while. I have house hacked 4 different homes (still renting my basement today) and it's been life changing for my family.

Happy to help however I can if you have questions.

House hacking is awesome. I have done that myself 4 times now. Getting the rental income counted toward your income, to help with qualifying, is going to be easier on a duplex, rather than something with a mother in law. (Not sure if you can even count it on a MIL place that is owner occupied - you'd have to talk to a lender) 

I've always gone with conventional loans on my properties, but going FHA is not a bad option if it's what can get you into a home sooner than later.

Every property, if priced right, and in a good neighborhood, is moving quickly. Whether it has been fixed up or not, there is a buyer out there for it. There's a lot of people moving in from out of state as well, especially from the Northeast and from the West Coast - California specifically. 

Congratulations on the awesome opportunity. Springville, and Utah county as a whole is exploding right now. Population is expected to grow 110% over the next 30 years. The market is hot, but there are still opportunities out there if you dig.

Congratulations on the decision to get started in real estate. Real estate is life changing!