All Forum Posts by: Shweta Patel

I started my quest for a park back in December. I am so excited to share that 3 months later, thanks to BP and all the support and confidence and education I have found here, I was able to lock down my first park! 

My question: 

The park is occupied by all tenant owned homes. SOme of these folks have a LOT of "stuff" in their yards. One even has a wardrome with the drawers pulled out to make for a make **** kitten condo with 3 kittens that were directly visible from a drive by. For the most part, the tenants keep their homes ship shape. But there are a few who look like they could qualify for the Hoarders show. 

Given that the clutter is outside of the home, how can I implement a community spring cleaning? 

I intended to send out a notice reminding the community of the rules and regs, but I also dont want my first play as the new land lady to be calling in the ASPCA for what seems to be unauthorized pets on the premises. 

Thoughts? 

Hey @Nicholas Morgan! 

I think with residential property, a pre approval letter is a must. 

You can verbally/ informally commit to a selling price while negotiations are ongoing and they might not ask you to produce proof of funds at that time. However in order to lock it down and prevent others from having access to the sale, you have to submit a contract and usually a pre approval letter.

These arent that difficult to obtain if you have a descent income and credit score. Infact, some banks offer online pre-qualification letters you can apply for and then use for any properties you are interested in. 

I used USAA and Suntrust to get preapproval letters before I started shopping, just to make my self look more legitimate while negotiating. 

As for commercial- It is a catch 22 like some have said above. You just have to keep contacting lenders until you find one that you "jam" nicely with and they can provide you with a letter so long as you have proof of funds. 

Lastly, if you have friends that are interested in investing, I think just verbally having people commit depends on how strong your relationships are with them. I am ok with verbal commitments with about 3 people in this world. 

Life can happen and people who have verbally committed might not be able to follow through- leaving you in a last minute hustle to find replacement funds. Not to mention potentially shake those relationships.

One mroe thing, theres something about finding a great deal that almost forces you to find the money to secure it. 

So even if you dont have it locked down now, dont let that prohibit you from going on the hunt. When its a great deal, the money usually follows in this business. 

Good luck! 

Hi! 

I would recommend that you take the one person with the best credit out of all four of them, and make the lease in their sole name. Leave the responsibility on them to ensure that the full rent gets paid every month and for the entire duration of the lease term. I would also stipulate in the lease that they are not allowed to have " guests" past a time frame of maybe a weekend/week without notification and approval in advance. And that they are not allowed to sublet their lease/ individual rooms without prior notification and approval. The tenants might need to share the rent to make it affordable and I get that. And as long as you have good people in there, its not a bad idea. Shared homes are a necessary thing especially if you have a larger home and want to maintain occupancy without going vacant for months looking for a " true family" to front the large rent. But don't make it your responsibility to obtain rent from each tenant. Make it the one persons with you retaining right to reject their choice in room mates if someone decides to leave or break up or <insert random college aged problem here>.

Good luck! 

@Tyson Cross Thanks so much for this great feedback! 

Keep it coming guys! This has been so helpful. I have already contacted a bunch of lenders, including local banks ( Oh my word that is not the most well oiled process)! 

Stay tuned for more! 

@Jon Dorsey Would you mind elaborating more on the RTO Contracts and how they would affect qualifying for financing? I thought it is a good thing to have POH converted to RTO's, so as to reduce operational costs/responsibilities and the cap rates are usually determined by lot rent only anyway.

Thanks! 

@Ian Tudor: Lot rents are ~275 with potential to go up to 350. 

@Joshua Diaz: The seller is not interested in financing. I have seen these situations before and they do seem like a great idea when available. But in this scenario, not so much. I will definitely look into going into a local/smaller bank to be considered; too bad USAA doesnt do this sort of stuff. Ive been with them for EVERYthing for the past 15 years. 

@Daniel Reyes Just messaged you, thanks for considering! 

Hi BP Fam,

So after weeks of listening, reading, researching, and scavenging through the interweb for a good fit on a Mobile Home Park deal, I think I have finally found one. 

Background: I am a (former Navy) physician by day and real estate dabbler by whatever is left over of my time. I have done a couple of rental properties via SFH. I have strong credit, long term investments and access to products such as the VA Loan and Physician Loan programs if I wanted to do Owner Occupied. Thus far, obtaining a mortgage has never been an issue.

Commercial loans.....not so easy. Apparently my Debt to Income is getting heavy and most large entities think anything under 2million is worth their effort.

My deal: $500,000 for a well maintained, utterly low maintenance, 17 lot park on 15 acres with room to develop 5 additional ones. Vacancy is only 2 of those lots, 2 are Tenant owned, and the rest of the 13 are RTO!!. Cap rate is a modest 8% ( based on lot rent only; 18% COC).

Its a conservative but stable return on investment which would make for a great stepping stone for me. 

But how do I get it funded? 

I called some hard money lenders: Usually 8-10% with a 2-4 year term max. 

FHA: Doesnt do loans this small so again, 7-8% with 20-25% down over 30 years

Who can solve this equation? 

Thanks in advance!!

@Jack Martin 

Thank you for such a comprehensive response. LOVE IT! I agree, I definitely want to stick with the mostly tenant owned " parking lots" as they say. And once more comfortable, then seek deals with higher caps/COC because they have room for conversion from Poh to RTO.

And the feedback on RVs was awesome! Didn’t think of it that way before. But absolutely makes sense. 

Thanks again! Sent you a connect request! 

Thank you so much!

Hi BP fam,

I am a rookie that is starting out in the MHP arena and interested in investing. 

I have done a bunch of SFH Rentals, but want to make the jump as I have heard it is a great market to explore.

I recently was discussing a deal with an MHP Broker who had listed a park for sale with both POH and Park owned RV's. 

He claimed that the current owner was converting his vacant POH lots into RV lots as you can divide 1 mobile home lot into 3 RV lots and get 3-4 x as much rent/month. His rent roll seemed to support this, however Id rather hear from you guys and get some more objective feed back. 

1. Is it better to buy a park that is only MH's or is a mix of MHs' and RV's ok?

2. Does having RV's/RV lots mean you have to have someone onsite at all times to facilitate rent collection as it is a more transient clientele? 

Thanks in advance and cant wait to hear from you all!