Posted by Tony Colella on June 01, 2005 at 12:46:27:
It sounds like you might be onto something with this deal if you can add the extra units.
Developing the lots can be a headache but may be worth it.
Start with your local planning department (if you have not already) and check with the inspection departments (building, water/sewer etc.) to find out what their requirements are. Even if their is no zoning, you are still likely to need permits and inspections for the move and set up of the homes a lots. Building with their needs in mind saves both time and money.
Refinancing this small mobile home park you created is no different than refinancing any commercial property. The bank will likely dictate how they want the property appraised but at the very least they will likely look at the income analysis (CAP rate) approach. You will likely need 12 months of seasoning to help prove the rent etc. so expect 18 months or more before you are able to really refi.
Just a note but commercial appraisals are not cheap. Unlike a single family home that might run a few hundred, commercial appraisals run a couple of grand.
Tony
land/home deal - Posted by Keith (East TX)
Posted by Keith (East TX) on June 01, 2005 at 09:21:24:
I am thinking of making an offer on 20 acres in a rural area. It comes with a 2/1(good condition) and 1/1 (eventual tear down yet rentable), pier and beam construction, separate utilities and septic. Deep well services both. Purchase price 90k+ or -. I’m confident rents would exceed PITI with 10% down.
I would like to add another 6-8 mobiles over time. I spent half the day on the phone with various city, county, and state agencies. It is in the county with no city jurisdiction. The best I can tell is that adding units for rental is a free for all. No need to subdivide the land first. Is this possible? I’m from California where you have to jump through flaming hoops and spend thousands of dollars just so they can tell you no you can’t do that.
Does this sound too ambitious for a newbie? I’m told I can refinance to get my cash back out after I’ve added a couple of units. Anybody ever refinance a single parcel with multiple rental dwellings?
Any input is appreciated.
Re: land/home deal - Posted by Sailor
Posted by Sailor on June 01, 2005 at 14:15:08:
You are going to need septic permits for each of your planned units. Before completing deal you absolutely have to know you are going to be able to install the septics. Do NOT remove the tear-down w/out 1st securing a “repair” permit that w/allow you to replace the MH, or you risk not being able to put in another. Good luck!
Tye
NC