Need help structuring MHP deal! - Posted by Christy (TX)

Real Estate Investing Mobile Homes & Mobile Home Parks
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Posted by Christy (TX) on February 08, 2002 at 10:33:26:

nt

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Need help structuring MHP deal! - Posted by Christy (TX)

Posted by Christy (TX) on February 08, 2002 at 08:13:19:

This is the 5th MHP we have seriously looked at in the past year. I am getting much better at evaluating them!

10 spaces rent for $100 (five newer ones rent for $125)
One brick rent house renting for $600

All spaces are separately metered and are on city sewage.

Expenses:
Trash dumpster: $80
Elect. for lift station: $10
Insurance and taxes: approx. $140 and $150 mo.
Maintenance: $150
One vacant space

DEAL STRUCTURE

Seller’s situation:

  1. Seller owes approx $70,000 on park, unknown if taxes and insurance are included or if it is assumable. Will find out more on note tomorrow.

  2. Seller is too far away to manage and would like to purchase a duplex closer to where they live.

  3. They have an offer they are considering, but said it was much less than the asking price.

  4. They may be flexible for owner financing IF I can help them get a duplex. They feel of course they need cash for that! They weren’t sure if keeping the note and doing a wrap would hinder them from qualifying for a note on a duplex.

Buyer’s needs:

  1. Buyer has very little cash to put in and likes it that way. We would be willing to cough up $5,000 out of pocket.

  2. We have recently ruined credit due to a failed business venture and do not qualify for bank financing.

  3. Buyer owns two single family homes with approx. $20K equity in one and $5K in the other. One mobile home note $12K remaining, and one 4-unit building with $15K equity.

  4. Buyer has never done a wrap or sub2. Buy am a quick study.

WHAT WOULD YOU ADVISE?

Thanks for any and all advice. I love this board. It’s truly a lifesaver!
Christy

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Re: Need help structuring MHP deal! - Posted by Chuck (AZ)

Posted by Chuck (AZ) on February 08, 2002 at 10:00:31:

Without knowing how you feel about the properties you curently hold, I hesitate to make a suggestion. But I’ll tell you what I’d do, you can take it from there.

I’d hang onto the 4-unit no matter what… and I’d trade the other properties in toward the MH park, assuming that the numbers jive (looks ok from what I see here), and the due diligance checks out… trying to get the seller to carry-back the balance.

The seller then have a nicely secured note that’d likely throw enough cash-off to cover the 3 proprties your trading in.

Looks like a win-win to me.

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Oops forgot price! - Posted by Christy (TX)

Posted by Christy (TX) on February 08, 2002 at 09:01:36:

$125,000 asking price