Posted by Darren Bane on May 03, 2006 at 17:45:48:
Sorry…these will be land/home deals.
best use of money in purchasing mobile homes - Posted by Darren Bane
Posted by Darren Bane on May 03, 2006 at 16:12:55:
My partner and I are just getting started. Our strategy is to purchase newer model doublewides in the $40,000 range and rent/sell them using lease/purchase. Between us we have app. $90,000 in HELOC’s. My thinking is to purchase these with cash from equity lines and then refinance them as soon as we can (maybe pull a little cash out) to free up the cash to purchase another one, and on and on. My question is: Do you agree that this is the best use of leverage? Is there another, better way? My partner’s credit score is 750 w/ good income and assets. Any input would be greatly appreciated.
Re: best use of money in purchasing mobile homes - Posted by Tim (NC)
Posted by Tim (NC) on May 08, 2006 at 06:21:33:
Darren,
Don’t know if you and your partner have decided what to do or not yet but here is my 2C. I’ve been looking at land homes and visiting banks. The problem comes down to financing. The banks I visited would only loan up to 85% of the sale cost. This may change when I get a deal under contract and shop it around at the community banks. But going in, I’m planning on coming up with the other 15% and fix up costs. I was talking with my reluctant wife about this when she suggested using a HELOC to make up the difference. I was tickled to hear those words come out of her mouth. IMHO the best way to use leverage (outside 100% financing) would be to use the banks 85%, kick in the difference with your heloc. Pay the bank for 12 months to season the note then refinance and pull out your cash. This allows you to spread your HELOC money on more deals and shows the refi bank that you are able to maintain the mortgage payments.
$Good Luck$
Tim
Re: best use of money in purchasing mobile homes - Posted by JeffB (MI)
Posted by JeffB (MI) on May 03, 2006 at 16:41:00:
If you are talking about doublewides in parks, this is a horrible, terrible idea. I know that is pretty blunt but better that then making a tragic mistake.
HOWEVER, if you are talking about doublewides on their own land (owning both the land and the home), well that’s all together different. There is a great book on how to do exactly this available here which describes the process in great detail along with the various financing options available to you.
Check it out at: http://www.creonline.com/catalog/c-229.html