Posted by Steve Case on February 05, 2005 at 22:41:22:
Steve,
May I suggest that you contact Ernest Tew. He has helped several people put together deals such as this and the results have been very profitable.
He can be reached at 352-475-1800.
Good luck,
Steve Case
Help on a BIG deal… - Posted by Steve
Posted by Steve on February 05, 2005 at 21:42:04:
Have an opportunity to buy a good sized park (140 units) in good college town (Hays, Kansas) that is decently maintained for $985k, currently 59% occupied and GI of $9300/mo. Am looking for guidance in which direction to take in trying to get this thing since I’ll definitely need help in getting this thing creatively financed, I’ve never done a deal, but don’t want to let this pass me by.
Looking forward to hearing what you guys think.
Steve
Steve, Both times - Posted by Philip
Posted by Philip on February 07, 2005 at 07:51:37:
Both times I have done thorough Due Diligence on Owner Financed Parks…the end numbers have NOT worked.
BUT, if you can get the price down, and an experienced helper/financier like Ernest Tew…you might do great.
3 times I have done my homework on parks and 3 times when I got the “hard numbers” from tax documents…the income had been inflated on the other “documents”.
Be careful…but keep working on it…you might make it work.
Philip
Re: Help on a BIG deal… - Posted by Phil Pelletier
Posted by Phil Pelletier on February 07, 2005 at 24:36:30:
At $985K for $9300 per month in gross income, you are right on the edge of upside-down. That is probably top dollar for that place and a lot of that sale price is for the “future expansion” ability. If you put down $200K cash and finance $785K at 6%, your payment figuring a 20 year AM is $5600 per month. Your taxes will be at least $1,000 per month, your water bill will be a ton ($1,000 per month?), your maintenance for a 140 space park will require a live-in Manager ($1,000 per month plus free rent?) and probably a maintenance guy ($800 per month plus free rent?). BOOOOMM! You’re dead negative as far as cashflow is concerned.
The expansion is attractive, but my scenario is with $200,000 cash down and a really good interest rate. If you put less cash down, you get hurt on interest rate rises, etc.
WARNING! WARNING! Don’t be seduced by the offer of a “low-down payment, owner financed” note on that place.
While that might be a nice opportunity, be careful you don’t become someone’s Owner Financed Cashflow Bee-otch! That is when you put very little down and pay so much interest on the note that there is nothing left each month for you, the new “owner/bee-otch”, except the constant headaches of owning a 140 space mobilehome park. In other words, make sure you get yourself paid each month in any deal you do.
Phil Pelletier