Need To Sell Mobile Home Park - Posted by AndyNC

Posted by Michael Morrrongiello on June 07, 2005 at 17:13:26:

Marketing your MH park for sale with owner financing is a smart move. Given some of the “Flaws” you alluded to involving your park, its doubtful any institutional investor will make such a loan to a buyer.

However that said, these “flaws” do affect the value of your park and do create some additional risk for anyone financing the sale of the park. Your park is ripe for some type of upgrade to the waste disposal system used in the park (perhaps tying into public utilites, or engineering some type of waste system that can be approved and used to service all of the homes in the park) - albeit that will be costly.

If you still sell the park under the current circumstances, and also finance the sale, then the resulting seller financed “paper” will need to be at a conservative LTV - loan to value exposure level.

You might consider taking back (2) two Notes and Trust Deeds… a well secured 1st lien Note and Trust Deed which can be sold and converted into a cash sum and then a 2nd lien which you might retain for income.

Given the fact that any new buyer of this small “mom n pop” mobile home park cannot replace the existing trailers with newer model homes, or that there could be sewage problems that might develop in the future because only 2 older septic systems are servicing 5 homes (we have seen this exact scenario unfold on several occasions)- you will need to be realistic about how to best structure the sale and the owner financing.

Another “twist” to consider is to find a buyer who might be willing to purchase your MH Park but allow you to take back your Trust Deed on THEIR other collateral as opposed to the park.

Michael Morrongiello
Since 1983 - Creative People with Creative Solutions

Need To Sell Mobile Home Park - Posted by AndyNC

Posted by AndyNC on June 07, 2005 at 11:42:13:

I have a potential buyer for my park. I would like to owner finance to him and then sell the paper. Is it realistic to find a note buyer for this given the following situation?:

I own 5 singlewides with land. Mobile Homes are OLD, mostly 70’s models, in rough shape. There are only 2 septic tanks that service these. A home cannot be replaced with a new one unless a new septic tank is installed, but the problem is there is not enough room for another septic. Buyer realizes this and is willing to work with what is there. One good well supplies water to all 5 homes (40 gal/min). Gravel drive way. Not the prettiest park.

Are there note buyers for something like this?

Secure your Note by OTHER property - Posted by Michael Morrongiello

Posted by Michael Morrongiello on June 08, 2005 at 19:58:18:

As we discussed, if you can find the right buyer who owns other real estate, (acceptable real estate with some equity in it)You might consider Deeding your FREE & CLEAR MH Park to this type of buyer and then taking back your seller financed Mortgage against THEIR OTHER property not the MH Park you are selling.

They will get your park F & C, you will get a nice lien (preferably in 1st lien position) against their equity in other more desirable property and now that “paper” you carry back will have far more marketability than if you carried it back against the MH Park.

The buyer in turn is now able to put some of their existing “dead equity” to use for this acquisition.

Best to your success,
Michael Morrongiello
Author of the Unity of Real Estate & “paper?” study course