Posted by Nathan on December 30, 2000 at 21:32:58:
I was reading your posted memo, and wow! it sounds expensive to have a water well, and seperate septic tank for each lot. That means that, the lot must be about an acre in size? I’m new at this mobile home thing, but down here in Louisiana when they develop a trailer park, you put a 4-6" water well in the front of the park, and a septic pond, or system big enough to carry the entire trailer park in the back of the park. The lot sizes are the width of a trailer, and car space, plus 20 feet apart. They stack them tight around here. You might want to check your state regulations on this matter. This might be an ideal for the other ten acres you have to develop? I’m too new to this to say anything about your deal, but you might ask Lonnie, or Ernest for advise.
Purchase of Mobile Home Rentals (Park) - Posted by Donald Hagan
Posted by Donald Hagan on December 30, 2000 at 18:46:02:
I am in the process of buying a 4 unit mobile home park plus 10 acres, all of the units are on separate water wells and septic tanks. Does any one have any suggestions on how to secure a loan and buy this park at the lowest closing cost and Down Payment. The mobile homes are all occupied at this time. The 4 units pull in $1200.00 a month and range in years from a 1974 to a 1990. The value or appraisal is not in at this time. Any ideas would be appreciated. The park is being sold thru a realtor for $97500. I have thought about offering $72,000. and propose to the present property owner to hold a 2nd note at $18,000. 4% interest for 5 years. This $18,000 would give me my 20% down and the interest rates would be low on $72,000. “HELP”
I’m assuming you are going to offer a total of $90,000 – with the 18,000 second note being your down payment. I doubt the Seller will want to carry part of the financing for such low interest. Even if he does, your note on that will be about $330/mo. Then even if you get a fairly low interest on your other loan (say 7 1/2% for 15 years) you’ll have another note of $667/mo. totaling $997. That’s getting very close to your total intake of $1200/mo. on the rentals. You need to figure insurance and property taxes and some maintenance into your numbers. I am assuming you want a positive cash flow from this park --unless you are planning to create more mh sites on the rest of the 10 acres.
Also, you didn’t say exactly, but it sounds like the 4 mh’s would be owned by you. Will they need repairs, etc.? I would consider buying a park without owning the mh’s – or perhaps you can structure a deal to sell them to the current tenants. That way you could finance them and have a note coming in on them, but not be bothered by the repairs they will need, since they are getting older.
Don’t know if this helps. We recently bought our first park, after looking for about a year and making several offers. Remember, you make a lot of your money when you buy – buy it for a price that will make you money, or keep looking.
Good luck!! Let me know how it turns out.
chill in Tx.