How To Strcuture Seller Financing On A MH Park?

Comments(5)

• 
  KyleGatton19th May, 2004

  If it includes any mobiles you will want to make the payments higher than the depreciation value. Also if it is a secondary note that you are carrying (assuming you are the seller) then make the it interest only payments with a baloon payment after a set amount of time. This way you get paid off, or you can get the park back should the new owners start messing up.
  I would read about what makes a note sellable
  Here and then follow those guidelines. This way woprse case scenario you have a marketable asset you can dump.
  
  Good Luck,
  Kyle

• 
  cheryllopez25th May, 2004

  JOHN --
  
  Are you going to be the buyer of the park or re-seller of the park note? That would help me give you the best advice.
  
  Cheryl Lopez[ Edited by cheryllopez on Date 05/25/2004 ]

• 
  active_re_investor25th May, 2004

  I am looking at buying and holding the note.
  
  Buyer put $40K in on a $108K purchase (yes, small park - eight spaces). No financial so far other then $3,400 a month in gross rents.
  
  Comps supplied by the seller of the note show a potential value of $240K. I was largely ignoring that and focusing on the purchase price plus cash down payment
  
  7% is the note interest rate. 20 year amortization with a 5 year balloon.
  
  I know what to do with a note for a piece of real property. Never dealt with a note on a park as a business.
  
  John
  [addsig]

• 
  cheryllopez29th May, 2004

  JOHN --
  
  I will add just the standard requirements
  
  1) Since it is being offered to you by the "seller of the note" then has the seller offered by any percent that they feel the note should be discounted?
  
  2) Seasoned note? How long has the note been receiving payments? On time or some slow pays or late pays?
  
  3) Financial docs on park (income and expenses). It would be great if you were provided before the payee purchased and after the payee took over the park. Hopefully, upgrades and improvements, and rent increases have occurred after payee bought the park.
  
  4) Have you drove thru the park to check out condition and any "red flags" you may see?
  
  Cheryl Lopez

• 
  bukzin14th June, 2004

  I would spend some time looking
  at the 'quaility of the income stream'
  
  Dig deep and find out...
  how long tenants have been there
  number of '3 Day Notices' issued
  past Unlawful Detainers given
  number of visits by law enforcement
  etc.
  
  In other words, its not just how much
  money is coming in, but how hard
  you have to work to get it!
  
  Good luck,
  Bukzin