Posted by Eddie-Mi on October 17, 2003 at 21:29:54:
32 unit park i paid 1300 for 1 million dollar liability.
53 space park with 1 million dollar liability + full coverage on a 40k house for $2000.
I self insure all my my rental units.
FINALLY PURCHASED MHP - Posted by Lynn
Posted by Lynn on October 16, 2003 at 12:56:52:
October 5, 2002 started looking at a MHP in our community. Discovered this site a month or so later. Emailed Ernest several times. Had several phone conversations with Ernest early on. THANK YOU ERNEST for all your time and advice. Ordered and read several times Lonnie’s Books, Ernest’s book and also Ray Alcorn’s book. Months later ordered John Hyre’s Kiss Guide to Bookkeeping. Mean while continued to educate ourselves with this board and the abundance of information available here.
Deal nearly fell through several times. Kept on plugging along.
Had very little capital to work with. (very little) Financing was a major hurdle. Made dozen copies of our proposal. (big 3 ring binder) Visited with our local small town bank first. Interested, but couldn’t do 100%. Owner would not do carryback. Tried another larger bank that already does lots of business with large MHP. Not interested. Owner will now do carryback. Go back to first bank. Interested–but let’s seek a Rural Development Guarantee. Talk about government red tape and a lengthy process. Kept plugging along. Finally received approval and finally closed on October 9, 2003 deal 1 year and 4 days after beginning this project. (Deal almost fell apart at closing table–talk about stress!!!)
Ended up with a personal loan at local bank for the 10% down at 6% interest, park mortgage at same local bank with a Rural Development Guarantee at 6% for 20 years and owner carryback for remaining balance. Owner agreed to match bank terms for financing. Owner carried about 30% of total purchase price.
In regards to insurance–I sure never found any quotes anything close to what Ryan-MO claimed to have gotten. Sure like to know where he got his insurance. I got quotes from probably a dozen companies and ended up happy with what I found, but no where close to Ryan.
Our park is 5 years old, has 47 sites, only 28 are full. The empties are developed except for driveways and sidewalks. Park has all city utilities all with underground service. All sites accomodate large homes, including doubles. 20 unit mini storage building included. Included is 7 newer model homes (5 singles, and 2 doubles) The doubles are nice; however, a lot of money tied up in those two homes, one is a 98 and one is a 2000. Couldn’t buy park without buying everything. The two doubles and three of the singles are rental properties. The other two singles were being sold with park financing. We bought the contracts on those.
In the meantime, about a month before we closed, we bought a 1999 single repo that was in the park for $7000.00. Did about $2000.00 in repairs. Resold for $21,500.00 before we closed on the park by taking $1,500.00 down and carrying the note. Improved our equity position temendously. Without that last minute deal, we may not have been able to meet rural developments ratio requirements for the loan.
Spaces rent for 140/mo
Total mini storage rent is 850/mo
Homes rent for 640/mo, 640/mo, 450/mo, and 400/mo–this includes lot rent.
Paid a little more than what we thought park was worth, a lot less than what seller thought park was worth, and just about exactly what it appraised at.
We believe it has a lot of upside potential.
Our 19 year daughter is planning on buying a couple of repos to put in our park and she plans to resell the homes and carry the notes.
Our 13 year daughter wants to know when she will be old enough to buy and resell. (Farm family kid’s raise livestock–so why not??)
Our 8 year daughter just wants to paint the storage sheds and earn some money.
Re: FINALLY PURCHASED MHP - Posted by Lyal
Posted by Lyal on October 17, 2003 at 07:25:08:
Lynn,
Great deal. All the elements needed to build some serious cash flow and equity. Also a great example of the most important quality you need for investing…PERSISTANCE. And the whole family involved as well. Incredible!
Thanks for sharing, Lyal
Re: FINALLY PURCHASED MHP - Posted by Ryan_MO
Posted by Ryan_MO on October 17, 2003 at 06:26:40:
Hey Lynn, Congratulations on your purchase. I feel your pain about the deal almost falling through and the pain in finding financing, even finding a bank that will do a MHP.
For the insuarnce, if you haven’t found it yet, check your local, small insuarnce agencies. The one we went with was Farmer’s and Laborer’s Insuarance agency in Wellsville MO, a rural farming town of less than 1000. They insure small up to larger properties in St. Louis which is 1 hour away. That is how we were able to get such a low quote. It ended up being exactly $880.00 to cover both the 2 acres and all 7 homes. So i’d just suggest checking out the small places rather than larger or midsized insurance companies if you haven’t done so already.
Congrats again on getting your deal done, it does take a might bit of patience to egt some of this stuff done.
Ryan_MO
Re: FINALLY PURCHASED MHP - Posted by Eddie-Mi
Posted by Eddie-Mi on October 16, 2003 at 22:06:49:
Awesome story. A 5 year old park? That HAS to be a nice one. If this breaks-even its a hell of a deal.
Nice perserverance
Re: FINALLY PURCHASED MHP - Posted by Steve
Posted by Steve on October 16, 2003 at 18:01:55:
Way to go!!! I watch this site alot but rarely contribute. Couldn’t help but write on this one. My family, also a farm family, started into mhp and mh investing about 7 years ago. We now have 5 parks, about 200 renters, and about 25 homes on contract. We have adjusted to the changing times and always learn something from this site. Keep working hard and learning all the time. It really does work.
Congrats Lynn!!! - Posted by Tony-VA/NC
Posted by Tony-VA/NC on October 16, 2003 at 15:26:20:
And a family involved in the business as well. Way to go.
Tony
Re: FINALLY PURCHASED MHP - Posted by Skip (CA)
Posted by Skip (CA) on October 16, 2003 at 14:59:53:
Lynn:
Congratulations!!! Persistance pays off and you have shown this. Ernest is a class act and full of knowledge. I’m sure he was more than happy to help you. You’ve helped secure your future. My best to you and your family.
Skip
Re: FINALLY PURCHASED MHP - Posted by Lynn
Posted by Lynn on October 17, 2003 at 08:27:44:
We are in a small rural area also. Ended up getting our liability for the park, liability and property insurance on the mini storage, liability on the homes, and inland marine on the equipment through a larger agent who got Cincinnati Insurance to write the policy. They would not do property coverage on homes, not their market. This package was $1150.00/yr. For months the best prices I was getting on the property coverage on the homes was through Foremost. Everyone but Foremost wanted $2,500.00 (not a typo) deductibles per home on wind and hail (we are in tornado alley) and even at that was higher than Foremost. At the 11th hour, a smaller agent in a rural town was able to write all homes through two companies–Upland and Kansas Mutual. Beat Foremost quotes and also offered automatic bank drafts which Foremost does not. Automatic bank drafts is a life saver for me. Like to pay my insurances monthly, can’t afford to miss a deadline. The 5 homes (remember they are late models) are insured for a total of almost $160,000.00 and this is costing just under $2,500.00 year. This is another place those two late model doubles are killing us. However, on the upside, they’ll be around awhile if we take care of them and they give a very good first impression to the park. Both are on nice corner lots. These 5 homes are rentals which will be about 10% of the homes in the park once the park is at full occupancy. Don’t plan on more rentals, think 10% is about right. Plan on doing a lot more park financed homes (repos and Lonnie Deasl). If any one has leads on better insurance, let me know. Does this sound in line with what some you are paying (except of course for Ryan-MO)?