All Forum Posts by: Tyson Cross

What kind of financials do they have? Will make or break a bank financing the park. It's already very small and a lot of lenders will have trouble with that size. Can you get a schedule E from the their tax return? This is a document related specifically to the property's income and expenses for the year. What are the lot rents? I wouldn't capitalize the rental income (Above lot rent) into the price. 

No, I'm sure they're out there. It's not the norm though. 

@Jonathon Weber I don't know where you're buying parks, but anything that is $800,000 for 80 pads is probably not a great mhp. Additionally if you're getting a park priced that way you are not going to be putting 20% down. HIghly unlikely a bank will finance that much of that kind of park. Look, I love mobile home parks, but the days of these pricing are over. Let's stop hyping the industry incorrectly. 

@Jack Martin gave some great answers. @Matt Lyons I would add that if you hoping this won't add work to your plate you are mistaken. It will take a lot of work on your part. If that's really your strategy you might want to consider buying a park that is already full of homes. 

@Charlotte Dunford if you are going to carry note or "seller finance" typically you will need to provide terms that are simliar to a bank. Most investors are not going to want to pay worse terms just for seller carry unless you are providing something enticing (ie. less money down, fully amortized etc.) You can seller finance any size park, that really doesn't matter. The beauty of seller financing is it's all fully negotiable between the Seller and the Buyer. I would argue that you usually can get a premium on the sales price if you're willing to provide a concession somewhere else in the terms. There is no reason to get a discounted sale because you're offering seller financing. It's usually the opposite. As previously mentioned, you should hire a broker not only beacuse they will get you the highest price with the best terms for you, but because it adds a layer of protection for yourself. You don't want the liability of selling your own asset. Exposing it to the market fully (as a good broker will do) will always always net you the highest price.  

@John Jacobus nailed it. Also, please please understand that anytime you are buying a park with homes included (park owned homes) you will almost ALWAYS spend more money on repairs and maintenance than you anticipate. People will move out and you will have to fix up a home that you thought was in better condition than when you initially purchased it. People don't estimate correctly how much work most park owned homes will need until it's after the fact. 

Both options are good. If they are a family member, would they let you get in with no money down and then make payments? Or do they want a pay out? There are private money loans etc  and other options too.

I would always recommend having a broker. It adds a layer in between you and the seller and frankly takes some of the liability off. You should try to negotiate to have the seller pay the fee. If they won't then its up to you to pay a fee or not, but I always think it's worth it. Just simply from reading your questions, it sounds like you are relatively new to this. Get an agent. 

And to add to the thread, this park should probably not be priced on an 8 cap no matter where it is. So yes, it's probably overpriced to some degree. 

that's a tough one because of the fact that everyone owns their home, yet the numbers are good enough to support the price. You have to be ready to pull homes out and put new ones in. You may have evictions, people passing away or people just leaving and you have to be well-capitalized in order to move new homes in. This should be part of your purchase plan - well capitalized. It also depends on where this park is located. We have several parks like this located in the city limits or close to the city limits of Portland, OR. These are now worth more for the land, although they recently passed an ordinance prohibiting redevelopment of these parks. Point is, you need to know what you're buying and what the future holds. At some point you will likely have to spend money to move homes out and bring homes in. If you're okay with that, then this park could be fine for several years potentially. The major difference would be if you owned these homes.