Posted by Michael on March 18, 2003 at 09:43:24:
I’m new to this also but it sounds like you might have a good deal going. I’m looking to get it this business so if you decide not to leave yourself cash poor please contact me. It sounds like a great way to start. Small enough to learn with and not be overwhelmed. I’m in the South Florida area. Drop me a note. Thanks and good luck.
7 MH ,s with land for 60k.Is the deal worth it? - Posted by Dan-fl
Posted by Dan-fl on March 18, 2003 at 09:10:22:
HI,all.I’m a SFH investor,I buy ,fix up and sell or keep for rentals.So I’m kinda new to the MH game.I just bought two MH,s with land a few months ago,one for 9k and rents out for $400 a month and another one I bought for $200 and put $3000 in fix up and it now also rents out for $400 per month.My question is that I have a chance to buy 7 mh,s with land for 60k from a investor that wants to move out of state.So far nobody else knows about this.My problem is he wants all cash and is not open to anything else.I do have the cash to do the deal,but it would wipe me out.I also have enough cashflow coming in from my other rentals to cover my living expenses,but I like having funds put aside for any problems that come up and if I do this deal,then I will have no funds.I don,t want to flip these MH,s,I want to keep them as rentals.They are worth 15k each and rent for $400 each and taxes and ins are $50 on each one.They are to old to get financing on.What do you think?
Get an investor partner - Posted by John Merchant
Posted by John Merchant on March 19, 2003 at 12:43:40:
Wish this were here in Pac NW, but it’s not very hard to go recruit a money partner for a great deal like this. Just pass the word to your local REI groups as to what you’ve just tied up with an option-surely you have, right?-and using the REI’s money and your know-how, push’er through.
Re: 7 MH ,s with land for 60k. - Posted by Tony-VA
Posted by Tony-VA on March 18, 2003 at 10:43:28:
When you are talking multiple homes with land you are entering the commercial analysis ring. Banks may not lend on an old home by itself, but they will lend based upon the cashflow this small park creates.
Local banks are your target for this type of deal and you will find someone to finance you, especially if you are willing to put down 20%.
The banks won’t value the homes much but the cashflow will count. This property should get some banks attention but they will not all jump. Knock on doors and get in front of the local bank’s commercial lenders. Keep knocking until you find the answer you like.
Most are lending on 15 to 20 year ammortization with a 5 year balloon (or rate call) and the rates were running in the 8% range when I last checked a few months back.
You may well be onto a nice cash flow machine here. Due diligence of the expenses and liabilities will shed light on what you can generate from this park. Upside potential such as rent raises, improvements that will generate cash and additional homes (if they can be added) all create equity fast and help with lenders.
Take a look at the “How To Articles” here and read the Commercial Analysis: Due Diligence article by Ray Alcorn (his list is towards the bottom of the article).