MH Parks and Commercial Properties.....RAY or anyone else??? - Posted by Carey_PA

Posted by ray@lcorn on March 19, 2000 at 21:50:30:


I’m glad you’re enjoying the book. Let me know if I can help with your deal.


MH Parks and Commercial Properties…RAY or anyone else??? - Posted by Carey_PA

Posted by Carey_PA on March 14, 2000 at 18:02:09:

I’ve got a quick question that I was hoping someone could answer. I was looking at a doublewide today that an elderly couple is trying to sell. Turns out the owner of the doublewide is the parks manager.

After talking to the guy for a while, I find out he’s the park owner too! I asked if he’d be interested in selling his park. And he says “Yes, are you interested in buying it” And of course I say, “Yes, it’s a definite possibility”

So we get to talking and it turns out he has to move to a different county because his wife is having medical problems, etc and he may want to sell the whole park on top of his double wide.

He said that he’s looking for 800K for the park. Now it’s a real small park, only 30 spaces, but really nice, very well kept. He said he’d be willing to hold the financing if he got a large enough downpayment. (he said 350K was large enough)

Now all of these numbers were just numbers he through at me, sort of unexpecting me to ask him if he was selling. (he’s going to be getting together the income/expense reports for the park for me) But i was wondering does commercial property work the same way as residential, where as let’s say, I had a much smaller downpayment then got a 1st with a bank or something and then he carried a smaller 2nd. Is that possible? Now keep in mind, I don’t really know what I’m talking about now (I’m reading Ray’s book as I type this lol)

But I’m just curious how this type of deal would work, I mean getting into it with as little as possible and everything.

I’m sorry if i rambled on in the beginning, but sometimes my head races at a mile a minute and I just write down everything that goes through my head.

Thanks gang,


Re: MH Parks and Commercial Properties…RAY or anyone else??? - Posted by ray@lcorn

Posted by ray@lcorn on March 15, 2000 at 11:05:00:


Hate to pop your bubble, but unless this park has some unreal rent revenue I’m afraid it is way overpriced. $800T works out to almost $27T per space. If the lot rents are $150? per month, $9-$10T a space would be more like it. Maybe the statements will show something we’re missing.

To answer your question about deal structure, yes, it does happen that you could do a small down, 70-75% first mortgage and the seller carry the balance. In my experience it will take a strong borrower financial statement and a track record to get it to a 10% down deal. The lender on the first will require it. What would be better, if the deal is in fact a deal after we see the statements, would be to negotiate a lower down with the seller, and give him a balloon in 3-5 years. That gives you the track record the lender will want, and the seller some cash now. Another option is to master lease the whole park for a year or two. Some sellers will go along with a deal like that if there is some upside to their deal.

But none of these approaches will work if the price is out of line. At $27T per space its going to take some very strong income for the deal to make sense.

Hope this helps,


Re: MH Parks and Commercial Properties…RAY or anyone else??? - Posted by Carey_PA

Posted by Carey_PA on March 15, 2000 at 22:08:23:


Thanks for responding to my post. I just wrote you a long reply and BAM it disappeared! I hate that…anyway…here’s some more info that i know about the park. All 30 spaces rent for $310/month and in conversation the guy told me that he nets $100k/year after all expenses are paid.

he also said that he recently had all of the homes individually metered. and he had new sewer and water systems put in. Oh and he updated the electric a ways back from 50 to 100.

That’s about all the info I have right now, but I’ll keep you posted when he sends me more info.

Thanks again and I’m really enjoying your book on mhps.


Re: MH Parks and Commercial Properties…RAY or anyone else??? - Posted by Nancy Cason

Posted by Nancy Cason on March 24, 2000 at 09:04:05:

Carey, If all of those structural upgrades have been made. Then continue working on the deal and price. Just keep insisting that the seller look at the income approach etc. A park without a lot of sewer, water, elect problems is a good find.