Posted by Clint S. Miller on May 14, 2004 at 08:47:50:
Greg, you’re right, I think I will present the Master Lease. Nothing ventured, nothing gained. If he says no, I’m out a few minutes of my time.
Option Purchase Possiblities - Posted by Clint S. Miller
Posted by Clint S. Miller on May 13, 2004 at 11:09:45:
66 Unit MH for sale
Will accept a Master Lease
39% vacant: water bill of $1600 per month, not metered
Overgrown, needs a lot of work, but roads are excellent
Situated on 16.2 acres, zoned commercial. includes 1800sqft
colonial 2 story, and a motel way overgrown. However it also sports a cell tower, that leases land.
Wants 1.2 Million - down from 1.5 Million.
Doesn’t want to separate park from rest of purchase.
I need some creativity. Here is what I am proposing:
1 Million
Five Year Lease
Zero Down
No Payment for six months - allows me to dump cash back into park
Payments for 54 Months at 3K.
So at the end of Five years, I purchase for the 1 Million
with $200K down. Finance 800K for 15 years at 8.5%
Payment: $7877.92
Need some creative strategy.
thanks,
Re: Option Purchase Possiblities - Posted by james(CA)
Posted by james(CA) on October 19, 2007 at 23:25:28:
Just wondering,did you buy the park, please share the deal structure, and how you are doing right right now with cashflow etc.?
Re: REDUCE THE INTEREST RATE & PAYMENTS ! - Posted by Cheryl Lopez
Posted by Cheryl Lopez on May 14, 2004 at 09:02:33:
CLINT –
I read in your post you are trying for a “master lease” rather than straight purchase. But …
YOUR PROPOSED OFFER YOU WROTE “finance 800K for 15 years at 8.5% [interest]”. Why did you select 8.5%? Your initial offer of 8.5% interest seems high on your buyer offer. Write your offer for lower interest rate and lower your paymnent.
I list and sell mobile home & RV parks. Currently, I have 5 park escrows with 3 seller finance.
-
5% (that was how the buyer wrote their offer and my seller countered 5.5% which the buyer accepted.)
-
8% (that was what the seller requested and with 2 multiple offers on this park this week both buyers want to reduce to 7% … should be in acceptance probably at 7.5%.)
-
8.5% (the seller wanted 10%, buyer wrote offer 7%, seller countered 8.5%, and we are in acceptance. Also on this park the seller wanted payments a lot higher, buyer countered to reduce payments by 30%.
GOOD LUCK
Cheryl Lopez
WOW Clint how exciting… - Posted by Greg Meade
Posted by Greg Meade on May 13, 2004 at 19:56:31:
not the MHP with roach motel attached, but that you have come to a point in your investing where you have the confidence to take on something like this! Think about it…8 months (or so ) you were just starting and had a ton of ??? now you are considering a 1M investment…Ilove it!
Whether you buy this Park or not isn’t prolly that important…there will be others. The real breakthru is you taking this on! I talked with you this morning and it is critical you set up this lease just right. The area this is in, I know 2 investors that regularlly post her that walk the walk and can assist you… most importantly, they are trustworthy. I will e-mail the names to you. You will make your money when you option this property and the pics showed it to be r-o-u-g-h. I make most of my money on rough units. I hope some other newbies catch this thread and hope you post results! Way to go Clint!!
Greg
Re: Option Purchase Possiblities - Posted by Dan (Michigan)
Posted by Dan (Michigan) on May 13, 2004 at 13:01:32:
Does your proposal assume that the seller is carrying the $800K financing? The 25 filled lots are collecting how much lot rent each? Will any of the 54 month lease payments go toward purchase, or is that part of the “carrot?” Will you have a problem raising the $200K at the end of five years?
Re: REDUCE THE INTEREST RATE & PAYMENTS ! - Posted by et
Posted by et on May 15, 2004 at 12:21:05:
Cheryl, you are very kind, smart and generouity in sharing your experience. I appreciated your willingness to help others. Your info is very helpful.
Re: REDUCE THE INTEREST RATE & PAYMENTS ! - Posted by Cheryl Lopez
Posted by Cheryl Lopez on May 14, 2004 at 12:22:16:
CLLINT –
Your revised sounds better using 5% (but the seller will probably want 6-7.5%).
I do not understand why you have the purchase price difference between a lender loan of 1.2 M or owner finance at 1 M? Should you keep the price the same or at least the owner finance should be lower with owner receiving interest in addition to the purchase price?
However, some seller’s opinion on owner finance is that you as the buyer will not have lender loan costs and expenses park appraisals ($4,000 to $5,000), and lender required documentation … so sellers and agents feel owner finance should and does bring higher purchase price.
Your ?outside lender? ? do you have a park lender lined up? If not ? even if you think you do ? there are 6 park lenders posted on website www.49erRealEstate.com (on the last page). Some park lenders offer loans as low of $100,000, $150,000, $500,000. Your park may qualify for the FHA 207 plan that Centennial works on 10% of LTV ? contact Steve on this program.
Cheryl Lopez
the master lease will take less money to … - Posted by Greg Meade
Posted by Greg Meade on May 14, 2004 at 06:11:21:
get into! that is the real advantage of them. to close a 1M MHP will cost 25k or so…with title policy and mortgagee policy. Pro rata taxes. insurance, taxes, etc. Plus ,the new owner is deferring taxes (cap gains) as it is a lease not a sale. Another huge cost. somethimg Tony likes to use to price these parks is ask the question," how much do youi want in cash flow each month?" 1M seems high for a partially empty Park…careful of the “desire to acquire” syndrome!
Greg
Re: WOW Clint how exciting… - Posted by Clint S. Miller
Posted by Clint S. Miller on May 14, 2004 at 05:41:00:
Greg Thanks,
Now, I’m going out on a limb here; what if I offer, instead of a Master Lease, the same terms, but purchase (if he will owner finance)? If not then Master Lease…
Re: Option Purchase Possiblities - Posted by Clint S. Miller
Posted by Clint S. Miller on May 13, 2004 at 13:21:37:
Dan,
This assumes 25 lots are filled over the next five years, rent increases to $300 per month (up from the average of $275 they are paying now). Of the 54 Lease payments, I hadn’t considered that, but would love to, with the given situation,regarding cash down: I will have almost 400K in my pocket in 5 years.