Posted by Brandon on December 20, 2002 at 08:45:27:
Seems like most trailer park buys are nothing but HEADACHES! Depends on the location and type of people that will be living there. I’m also a newbie, but I haven’t made any investments yet(still learning). From what I have read, it seems modest to say “think twice about trailer park investments”. You want to really evaluate the situation at every angle.
purchasing mobile home park, should I?? - Posted by dan
Posted by dan on December 19, 2002 at 20:35:38:
Owner is selling park for $400,000, with $40,000 down payment and he will finance the rest at 9.5% over 25 years.
6 acres of land includes two doublewides, 23 singlewides, and one 2-bedroom house.
Real Estate Taxes $1,344.62 yearly
Monthly
Total rental income $8,275
Maintenance $800
Utilities $467
Insurance $374
Taxes $300
Advertising $250
Supplies $200
Total Expenses $2,391
$8,275 - $2,391 = $5,884/monthly projected income
Will I be able to get a loan for the down payment and will the bank include the monthly income from park towards the loan? My payment to the owner at 9.5% will be roughly
around $3,200…So bottom line income will be $2,684/month.
It looks good but still would like some thoughts and suggestions. Thanks!!
My 2 cents - Posted by gerald (tx)
Posted by gerald (tx) on December 19, 2002 at 22:31:41:
The bank will not give you a loan for the down payment unless you have other collateral to pledge. As a rule, hard money lenders don’t like to see you going in on nothing but your elbows.
Second the bank doesn’t want money from the park, they want money from you! You are responsible for the loan, if you get it.
Next, has the owner been the manager? Are you buying his headaches? Sounds like with all those park owned mobile homes you would wind up with a lot more headaches than just renting lot spaces for owners. Is it an upscale park or a landing place for undesirables? Park owned homes wind up with a lot more “trailer trash” tenants than renting to owners.
If you have to borrow the down payment, this would reduce your income to less than $2,000/mo. Would you be “buying a job” or “making an investment”? There’s a big difference. If you are buying a $24,000/yr job with the potential headaches I sense here, I would think twice.