All Forum Posts by: Jon Dorsey

Seller financing is a great way to defer taxes. 5 years is what commercial lenders will do as well and this gives the buyer time to season his records so they will be able to get it refinanced.

I disagree with the larger down payment as Seller financing needs to be advantageous for both the seller and buyer. The seller doesn’t have to worry about appraisals driving down the price or lenders holding up the closing. Buyer gets to buy a property that may be otherwise be hard to get traditionally financed and at reasonable terms.

To be honest no bank and few institutions are going to lend on the purchase of the park with all those POHs, unless you’re keeping the homes and strictly selling just the park. 

I’m not going to put down 50% to buy your property. I’m going to use that as a 25% down payment on a property twice as large without any POHs that can be traditionally financed.

Sorry to break the news but you’ve decided to sell your park. Even if you got cash it may still be mis-managed.  If you don’t want to sell it then don’t. If you want cash then state it. 

If you go with seller financing then you’ve managed it before and know what it takes if the buyer defaults. 

If you’re really worried you could do a 3 year balloon with a 2 year option. In this case the buyer still gets 5 years but at year 3 he buys the option, say 3-5% of purchase price to be applied towards principal, and you get the reality check that things are still going well. If things aren’t working then you get it back at year 3 vs 5 and can mitigate deterioration. 

Hope this helps. Congratulations on the sell. 

How do I attain basis for depreciation on this property;l?

I’m at odds with my CPA and looking to see what I can do to maximize my depreciation on the property

I purchased a MHP at an incredible deal, way under FMV due to a death in the family and the heirs not wanting the property.

Purchase: $300k

FMV: $550k

Tax Appraisal Land Value: $253k

The issue becomes that usually the improvements (road, signs, fence, dumpsters, electrical, water/sewer, lots, etc) usually run 60-75% of value of the investment and thus is depreciated but with the land value on this about equating to purchase price, I’m missing out on this write off.

I was thinking of getting a cost segregation done to place a value on the infrastructure and improvements, and then add that to the tax appraised land value to determine my basis. My CPA kind of follows but doesn’t think we can create a basis above what I paid for the property.

What is your take on this or what have you seen that may be helpful?

Thanks in advance.

*Any advice received is not legally binding as you are not my CPA or Attorney*

How do I attain basis for depreciation on this property;l?

I’m at odds with my CPA and looking to see what I can do to maximize my depreciation on the property  

I purchased a multifamily at an incredible deal, way under FMV due to a death in the family and the heirs not wanting the property.

Purchase: $300k

FMV: $550k

Tax Appraisal Land Value: $253k

The issue becomes that usually the improvements (road, signs, fence, dumpsters, electrical, water/sewer, lots, etc) usually run 60-70% of value of the investment and thus is depreciated but with the land value on this about equating to purchase price, I’m missing out on this write off. 

I was thinking of getting a cost segregation done to place a value on the infrastructure and improvements, and then add that to the tax appraised land value to determine my basis. My CPA kind of follows but doesn’t think we can create a basis above what I paid for the property.

What is your take on this or what have you seen that may be helpful?

Thanks in advance.

*Any advice received is not legally binding as you are not my CPA or Attorney*

@Terry Butt I appreciate the recommendation but I’d imagine Jacksonville is a little too far away from Rocky Mount. 

1) you can but check with city/county rules.

ie in Greenville County SC you cannot bring into the county pre-HUD homes but you can move them within the county or out of the county.

2) value the land and home separately. It's too much like a SFH to apply a rental aspect to value.

Land: look at taxes

Home: look at book value or comps in the area 

Loooing for Attorney recommendation to look over PSA and help setting up leases. Property is in Rocky Mount. 

Also looking for PM recommendations for the area. 

Thanks for any help. 

Looking to connect with individuals in SC, specifically upstate area. Had a few questions about MHs in that area. 

@Ryan Groene What makes you see POHs as more of the normal going forward?

I have 4 townhouses in Bluffton SC and am looking for a new property management company. Any recommendations would be appreciated. 

I did not. Seller was unrealistic and unwilling to compromise on price, terms, anything so I walked and I believe it still hasn’t sold.