All Forum Posts by: Mark Walker

@Mark Walker - is this in the B'ham market?  Either way, we can finance this asset class.  Reach out.

Quote from @Chris Mason:

Just sent this over to a client, in place NOI yields a ~9% cap rate on this park, which of course feeds into making 75% LTV doable. All are at less than 1.5 points. Blacking out just enough so that the exact property can't be looked up. Note one of them is at 65% LTV.

Good hunting!

 Thank you for this, I'm looking at a MHP currently. 

7/25, 10 years maturity:

Fixed interest rate for 7 years.

25 year amortization / payment schedule.

Balloon payment in 10 years. 

That part is normal for commercial mortgages; 5 year maturity is common, and 2019+5=2024 is why many are expecting offices to have a rough couple years.

Net operating income (NOI) is net profit before the mortgage payment, and determines how big of a mortgage you can get.

NOI / cap rate = sales price, and sales price x cap rate = NOI. If you can remember $1m <-> $60k <-> 6%, you can bounce between price, NOI, cap rate. NOI, and thus cap rate, feeds into how much of a down payment is required b/c it feeds into the "sizing" of the loan.

Many asset classes, like apartments and offices, have less than ideal in place cap rates today, so you need 35% or 50% down to buy them (unlike a DTI-based home loan, your personal W2 income cannot be used to significantly offset). Not so with many mobile home parks. The guy was expecting something like 40% down based on talking to other folks buying commercial real estate (not of the mobile home park variety), so was super happy with 25% down, and then I had bigger pockets open in my other browser tab, and here we are.