Posted by Daphne Lowe on November 23, 2005 at 17:36:00:
CBA- Crystal Ball Analysis
A tool used for deal analysis inquiries when there is insufficient information provided by the inquirer.
Daphne
MH Park Purchase-A Deal or Not - Posted by David
Posted by David on November 22, 2005 at 21:56:43:
There is a MHP for sale fairly close to me. I’d like to know if its a deal and how one can be financed if it is a deal. It has 71 lots and extra land so 20 more lots can be developed. Lots are limited to 14x60 homes. 58 lots are rented out right now for 200.00 a month each. That includes the water and garbage pick up. The asking price is 875,000. Is this something I should buy and if so, how does it get financed. My wife is a banker and she won’t touch it. She doesn’t know of anyone who would and she’s been a banker for almost 30 years now. Any advice would be appreciated.
Re: MH Park Purchase-A Deal or Not - Posted by rise2it (VA)
Posted by rise2it (VA) on November 24, 2005 at 12:17:57:
“Lots are limited to 14x60 homes”
That’s one big reason the selling price is TOO HIGH.
While you can still buy NEW mobile homes that are that size, most anything sold past about 1978 is going to be 70-80 footers. It’s going to limit YOU if you choose to put homes in there to resell yourself, OR it’s going to limit the quality of your lot renters, and make it really hard for YOU to fill those extra spaces.
Personally, I like small mobile homes. I DO NOT like anything that ties my hands and limits my options.
Same with those 20 acres - to me it’s simply dead land.
Never buy ‘potential’ - buy what it is RIGHT NOW.
Financing is not the hard part. Getting a deal on the park is the hard part. It makes no sense to put yourself into a bad financial deal just because you know you can get financing, with hopes of ‘turning it around’.
You have GOT to find out taxes, insurance, water, trash, and what type of sewer to even begin to come up with a realistic offer.
Find those things out and post here again with all the info, and we can give you a better idea of things.
Re: MH Park Purchase-A Deal or Not - Posted by Don Dion
Posted by Don Dion on November 23, 2005 at 10:47:59:
I would be happy to run the numbers on your investment. It does not suprise me at all that a local bank would not touch a MHP. The most popular calls I am getting lately are on Self Storage and MHP’s.
Re: MH Park Purchase-A Deal or Not - Posted by Daphne Lowe
Posted by Daphne Lowe on November 23, 2005 at 09:46:29:
Using CBA, this is clearly a deal not worth pursuing.
Re: MH Park Purchase-A Deal or Not - Posted by Mike Cheatwood
Posted by Mike Cheatwood on November 23, 2005 at 09:24:14:
David,
I purchased a 117 lot MHP 11 months ago by using a 1031 exchange as the downpayment and the rest carried back by the seller (a common way of financing MHP’s).
However, as Nate has correctly pointed out, without more information the board will be unable to offer our opinions on if it is a deal or not. Information that would be helpful is the sellers motivation (real reason for selling other than “wants money”) and the income/expense (P&L) statement for the property over the last 12 months.
In closing, as has been noted many times by our esteemed moderator, smaller banks (located in the same town) rountinely finance MHP’s, land/home deals, etc… Perhaps your wife knows a banker at a smaller local bank that might readily consider adding a positive cash flowing property to their portfolio that is just “too small to consider” for your wife’s bank… (just a thought).
Mike
PS Don’t pay the seller a premimum for the privledge of spending your money/time/effort in developing the extra 20 acres.
Re: MH Park Purchase-A Deal or Not - Posted by Nate - PA
Posted by Nate - PA on November 23, 2005 at 07:24:26:
Any info on what your monthly expenses would be(taxes, insurance, garbage, water, etc.)?
Re: MH Park Purchase-A Deal or Not - Posted by David
Posted by David on November 23, 2005 at 10:39:16:
What is CBA? I’m just starting and don’t know much yet.
Re: MH Park Purchase-A Deal or Not - Posted by Gary
Posted by Gary on November 28, 2005 at 22:22:57:
I don,t believe the deal is too small for them, the problem is the don’t have a qualified person available to do an appraisal and have no idea how to calculate value. These bankers aren’t as smart as they would have you believe.