All Forum Posts by: Peak Deshawne

Hello everyone,

I am looking for some opinions and advice on a deal I'm looking at. In short it is a value a 100+ unit mobile home park currently grossing $21k per month. The owner is asking $1.2m and willing to carry $600k. The property has roughly 70 vacant lots, vacant commercial buildings, and a small multi-family units. Potential rent receipts total +56k/mo. I've started building a relationship with the owner's and they seem to like me and want to sell the property to me. Unfortunately, I do not have the cash ($650,000) to put down. I have about $500k in equity across my other properties, and thinking about pursuing a master lease into seller financing like Brandon Turner did with his first apartment building. Any devil's advocates welcome to tear this apart. 

Facts:
Owner repossess the property from previous owner due to being a slum lord/deferring maintenance.
Is now run as a "mom an pop," park
All current revenues are being funneled back into the park in preparation for sale
Location is great
Park is being transitioned to county water, 70% of the park is on well water for now
Average rents $450/home (2/1s single wide)
Expense report includes cost of labor and materials in renovating downed homes already on the property (11 vacant + 1/2 stick build multi family units)

Is there a way I fund this by putting 25% of $650k down and seller financing the rest? The issue seems to be then that there will be hefty mortgages (2) on the property that will definitely eat into the cashflow. Some items such as the lawn care and labor could be reduced/replaced with sweat equity. I'm open to hearing any creative financing options for something like this! Owner will carry 50%!
 

Expenses listed below. 

Thanks in advance BP!

Hello all, 

Here's some backstory to my dilemma:

I recently met an investor who is looking to begin liquidating his properties. He has accidentally also become a great mentor and friend. After a few meetings with him and telling him about my desire to purchase 100+ units this year,  he told me about a property he owns that is having management issues. Long story short, he gave me the opportunity to investigate and audit the property manager. I found she'd been stealing rents (dated system of collecting blank money orders), upon other issues such as no bookkeeping, maintenance accountability systems, etc. I am now managing the property while working full-time in the Air Force. He knows of my interest in buying the property and is giving me this opportunity to manage/learn more about what I will eventually buy. 

The Deal:

The seller has mentioned he would be willing to sell me the properties "completely on credit." I can only assume this means seller financing the down-payment of a multi-million dollar deal. Too good to be true right? Well my intentions are true and I would like to buy it this year. The structure I am hoping for would be assuming the current note on the property while the seller carries the remaining balance of the purchase price. I would like to put $500,000 down (the same amount the seller originally put down when he bought it years ago) held in escrow to handle the capital expenditures needed after closing. I have had hands on all property finances, current maintenance, tenant complaints, and a general idea of what the property would need to increase the value.

Questions:
I have other properties with decent equity positions, I could raise $100,000 of the down payment but I'm not sure how I could come up with the rest? Would it be best to seek out a hard money lender? I would be buying the company that owns the property, so does the bank have to approve me to assume the note if I buy the company? I really want to buy this property. I'm going to begin speaking with local banks about my situation and see what options there may be. Has anyone ever encountered a deal like this? 

Any and all help is appreciated!

Are there lenders out there that will let me use my equity in my current portfolio as a downpayment against another purchase? Basically what Im wanting to do is avoid refinancing because my employment status is a bit sticky but I begin a very stable career in January. In short I want to talk with a lender and maybe start a 2nd mortgage position on my properties or give them an equity position in lieu of refinancing, then using that cash as a down payment? Is this possible?