Why are potential mobile home park owners in such an all fired hurry to run down to the bank for a loan and the accompanying pile of paperwork that lays waste to half the Amazon rainforest? Don’t get us wrong. Banks are great. We love banks. Banks have allowed us to make lots of money investing in real estate but, particularly with mobile home parks, why not pursue the owner financing option first?
Why would an owner want to take on that risk? To answer that question, we need to take a look at the demographics of park owners. Often they are older men who have been running the park hands-on for a long time and their primary goal is to get out of the business and take it easy for a while. Additionally, they have proven themselves to be ruggedly independent entrepreneurs who would also prefer to avoid the bank anal exam if at all possible. They might be very amenable to providing owner financing. You won’t know unless you ask, will you?
Besides the obvious, owner financing offers the buyer an advantage. First of all, throw out the 20% or 25% down rule. Your down payment will be whatever the two parties agree to, and it could be a lot less than bank would require. Think of it from the owner’s viewpoint. Maybe he’d rather not deal with the tax problems caused by a million dollar sale and would rather take a decent chunk of cash upfront and coast on monthly payments for a while. Remember that his main goal is to get out of the mobile home park business and if you’re a serious contender, he just might cut you a sweetheart owner financed deal.
The MHP Listings Team
Flickr / Aidan Jones