Mobile Home Park Investing for Beginners | Creative Financing

In today’s video I want to talk to you about mobile home park investing for beginners, I will talk to you about how you can get into buying mobile homes through Creative Financing. Enjoy!

Hey guys welcome to the youtube channel pacemorby here i’m one of the hosts of triple digit flip on a e that show airs every saturday 12 p.m eastern time and if you guys don’t have cable you can always watch it on hulu in this video we are going to explain to you how amazing mobile home parks can be on seller finance utilizing creative finance so the question is

Can i buy a mobile home park without cash credit or credentials and the answer is yes my student tommy clark comes in to one of my weekly zooms with my students and asked me a great question about a mobile home park he had just recently locked up utilizing seller finance and the answer that i give him in this video he says oh my gosh i didn’t even think of that

Guys this is why having a mentor is so incredibly important is because you might be going through the path of getting deals watching youtube videos reading books going to seminars but what happens when you run into a very specific problem and you need a very specific answer that is what i give tommy clark in this youtube video and i hope you enjoy please that if

At any point during this video you get enough value to leave me a comment give us a subscribe or a thumbs up i would appreciate it and we’ll see you in the next video what’s up man how’s it going what up dog so it’s a mobile home park in alabama so it’s seller finance is 15 units okay um only seven of the 15 are income producing right now seller wants 240 10 down

At 8 percent for 30 years that’s a really high that’s a really high interest rate yeah i know that’s that’s like the only thing that he wanted out of it though so so why are the other ones not income producing because they’re vacant they’re empty there’s no units oh the lots are empty right right it’s all separate septic tank power water um so really tommy let

Me let me work let me i’m going to break down this deal for you real quick okay all right because i want you to think about the the buyer the end buyer and keep them in mind on this okay so let’s talk let’s talk through that if i buy this deal from you it’s 240 000 right right okay and i’m gonna put down twenty four thousand dollars to the seller okay what’s my

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Payment for the remaining balance i got a remaining balance of two hundred and sixteen thousand no i’m sorry two hundred and two hundred sixteen 000 at eight percent what’s my payment i believe it’s 15.80 okay 15.80 that does that include um p-i-t-i or just a pi just p.o okay so we got to add taxes and insurance let’s add another 200 bucks on that so i’m at

1780 bucks a month okay so if i’m at seventeen hundred and eighty dollars a month that’s my starting point okay that’s what my i i have income and income does not mean profit but that’s my income right how much is my i’m sorry not my income that’s my payment i apologize guys that’s my payment what is my income with the units as it is right now 3 300. okay 3

300. that’s how it is right now yes okay great and only five of the seven are parked on the other two are just lock rents got it okay so my plan is to to get it filled up and then seller finance out the units and then you’re gonna keep it for yourself oh the land yeah but i don’t want to have to manage it so are you buying this deal yourself uh yeah i’m looking

For for an investor on a private money lender got it okay cool and then we don’t need to talk about it but you got different question questions what what are your questions um yeah i mean i just wanted to know what you thought about the deal mostly and then um like how you would go about doing the seller seller finance and the units like would you sell them off as

You moved them in or would you sell or finance the ones that are there first or how would you i would never even put mobile i would never even put trailers on on your dirt i would just have people bring in their tr their trailers themselves don’t go by trailers let people bring their own trailers in there okay you know what i’m saying so just go after the light

Rent and not even worry about that just go out you don’t yeah why why go through the hassle of going and buy a mobile home and then seller financing the mobile home just to fill a spot just go find people to fill the spot with their own trait like a lot of my mobile home parks i’ve got multiple people that just have their trailers not their trailers but their rvs

And they’ll come live in there for two three months at a time on their rvs with their truck right so you’re gonna get a lot of people just come in there and fill up those spots where you don’t have to go buy mobile homes to fill in those dirt spots you can just have people with their rvs and their trucks fill in those spots does that make sense yeah it does okay

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So for me let’s go through this deal again i was going to say yeah it looks like a pretty decent deal even if um even if you are going to try and assign this it looks like a little decent deal because how many lots are empty right now eight okay so and then you’re probably going to be able to lot rent these out at what 300 bucks a month maybe that might be a

Little high okay so 250 probably 250 yeah okay so 8 at 250 is 2 000 right yep so my potential income is fifty three hundred dollars right right after i get those lots filled okay that’s great now if that’s my potential income is 5300 what is my total cost my total cost is let’s go through it you got 24 000 for your seller the down payment okay going back to the

Entry fee here two does he have any arrears or liens i already know the answer is no no okay so that’s zero why are people saying congratulations somebody says congr i think because they’re like you’re hanging out my house or something i don’t know maybe i don’t know um okay so that’s two three is my assignment fee which you are you direct to seller on this

Yes okay so you’re zero dollars here you got closing costs which are going to be probably like let’s say three thousand bucks then you’ve got renovations let’s just say hypothetically you got ten thousand dollars in miscellaneous stuff that’s going to come up over the next couple of months just to be safe six you got a couple months of payments and stuff so let’s

Just say another five thousand bucks to be safe here and then seven to find those tenants over the next couple of months you’re probably gonna spend some marketing dollars about two thousand bucks okay so my total cost to get into this deal you don’t need any of this right now but you are going to need this to fully get it up to that fifty three hundred dollars

Does that make sense yeah okay really all you need right now is twenty four thousand plus the three thousand right so you need twenty seven grand so if you’re at 27 000 and you find a lender at let’s say 10 interest that comes in here with you your payment with that lender is going to be even 12 let’s say let’s hike it up to 12 because you’re new and let’s say

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They don’t they’re like yeah well i got to have a little bit more return they’re gonna have a 270 payment that comes to them every month um that’s the private lender and then you’ve got your 1780 that goes to your your seller finance note right so you’re basically then let’s add another miscellaneous like thousand dollars on here for like park maintenance

Landscape whatever just miscellaneous stuff and let’s just call it and i know there’s engineers in here losing their mind the way i just zoom through math but let’s say let’s just call it thirty five hundred i’ll add like three four hundred dollars in buffer so your cost to run and own this park is thirty five hundred dollars and your income on the deal deal is

Fifty three hundred i like the deal i would do that deal if i lived in your area i would do that deal you’re going to make 1800 a month net on this deal and you’re going to be able to pay down this guy’s loan over time and maybe even at some point refinance him out at like a lower interest rate but even at eight percent interest you still have the ability to make

1800 net right so um what would you do with the five that are currently park owned would you sell those yeah i would sell those on seller finance i’d get rid of them off your your bucks get rid of them so um so i understand like i need to use an rmlo to do that with since there’s five right no not necessarily okay would you say these aren’t houses bro these

Are cars right right those things are not real that’s not real estate those are those are trailers those are vehicles would you hold the notes yourself if it was your deal or would you sell the notes i’d hold the notes what’s going to happen is if they default guess what you have in your paperwork you have the right to take those mobiles back and they’re already

On your property right so the last thing you want to do is have somebody hold a note on a piece on a vehicle that is on your property you should hold the note because they’re on your property therefore you want to control those you

Transcribed from video
Mobile Home Park Investing for Beginners | Creative Financing By Pace Morby