How To Get Zero Down Financing On A Mobile Home Park

With single-family homes, a legitimate zero down deal is about as likely as sleet in San Diego. However, with mobile home parks, they are as common as rain. Of the 25 mobile home parks I've bought, about five of them — or 20% — were zero down.So how do you get a zero down mobile home park deal?Just watch the listingsMany mobile home parks are listed for sale with seller carry at low amounts down. A 5% or 10% down payment can easily be converted to 0% with a little negotiating. You'll find many such listings on the large internet park listing services, such as most common negotiating strategy is to identify capital improvements that would cost as much as the proposed down payment, and then tell the seller that you need to reserve the down payment money to make those repairs. After closing, you either skip the repairs, or find a lower cost alternative.Wrap the existing noteIt is often possible to wrap an existing when buying a mobile home park. What this means is that you do not have to get a new loan, and the seller subordinates his note to the existing first. Here's an example. A seller has a mortgage of $400,000, and he wants to sell his mobile home park for $500,000. Rather than put up a $100,000 down payment and obtain a new loan, you assume the loan of $400,000, and place a second of $100,000 in favor of the seller. You do not put anything down.Why would a seller do this? Often, it's for speed. It takes a long time to get a new mortgage on a mobile home park. Many times a seller, especially someone who does not have a very large profit coming their way, are interested in getting the park into someone else's hands as quickly as possible, and move on to the next deal.Lease/purchase the parkThis is another fairly common construction on purchasing a mobile home park for zero down. Instead of an outright purchase, you lease the park at a set monthly amount, with the option to buy it at a pre-set price in the future. This allows you to make the necessary changes to increase the net prior to closing.This construction is especially attractive on parks that are not making sufficient net income to support a mortgage of the amount necessary to buy it.ConclusionZero down deals are still alive and well in mobile home parks. They don't require that you buy bad properties or deals with no income or some other difficult blemish. They are just a standard construction of the affordable housing industry.

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