BARCLAY ASSOCIATES GENERAL INFORMATION FOR BROKERS AND OTHER INTERMEDIARIES. LENDER CRITERIA FOR MOBILE HOME PARKS AND MULTI-FAMILY PROPERTIES.
OUR SPECIAL REPORT
We have written an informative " Special Report for Income Property Buyers" which will be very useful to you. Here is the link to this valuable and free report.
We highly recommend that you view and then print out this report for future reference.
Below you will find our current criteria for multi-family (apartment buildings) and mobile home parks.
In the sections below we have also included two interesting articles on the advantages of owning a mobile home park and how to find parks to buy.
CURRENT CRITERIA FOR MULTI-FAMILY (APARTMENTS)
We are showing the following list of facts and criteria regarding lender requirement for the refinance or purchase of an multi-family property.
- The LOAN AMOUNT should be no less than $250,000.
- Up to 80% LTV based on a 9 or higher cap rate.
- 5.0 to 7.0% interest rate (approx. July 2020).
- 25 year amortization. 5 year fixed rate.
- Should have 90-95%+ occupancy rate.
- The buyer should have a minimum 630 or higher FICO score.
- 10% minimum cash down requirement from the buyer
= 10% 2nd position seller carry back needed unless buyer puts 20% down.
- Should have 10 apartment units.
- The building should have a good appearance.
- The grounds should be well-kept.
- The property should be in good repair and should be located within 20/30 minutes of a population center (i.e. county seat) of approx. 20,000 or greater.
- You should have six or more digital photos of the building(s) for submission to lenders.
These are only average parameters which may vary to some degree based on the individual property.
CURRENT CRITERIA FOR MOBILE HOME PARKS
The Park should be:
- Nearly fully occupied. At least 90% or more.
- No more than 5/10% "park owned" units. 90% or more of the units should be OWNER OCCUPIED, not "park owned". Lenders favor owner-occupied "mobile home parks" not park-owned "trailer parks."
- Streets in the Park, if any, should be paved and in good repair.
- The Park must have a good appearance. All units should be skirted. There should be well-kept lawn around each unit. There should be grass where the lawn area meets the street.
- The park preferably should have a substantial amount of modern mobile homes. These are the 14' by 60' units which have replaced the older single and double-wides. However, older double-wides are acceptable if they are well- kept.
- No RV areas in the Park.
- Also send us the full USPS postal mailing address of the Park so we can look at it in Google Earth
- Our lenders will not consider any properties which have a "trailer park" look. A "Trailer Park" designation generally means a high percentage. of park owned units, a large amount of old 8' x 25' trailers, dirt roads through the Park, general overall junky appearance of units, unpainted office etc.
MOBILE HOME PARK FINANCING INFORMATION
- 65% LTV based on an accurate net operating income (NOI) at a 10 cap or more.
- 15% minimum cash down required from the buyer.
- A 20% 2nd position seller carryback is required or the buyer has to put 35% down.
- Approx. Interest rate in the 6.0% to 7.0% range (June 2018).
- 5 year amortization - 5 year fixed rate.
- Buyer should have a 650+ FICO score.
- The property should be in good repair and should be located within 30 minutes of a population center of approx. 25,000 to 50,000.
AN ARTICLE JOSEPH SPATOLA WROTE FOR HIS 2,300+ LINKEDIN FOLLOWERS.
ARE MOBILE HOME PARKS A GREAT INVESTMENT THAT ARE OVERLOOKED BY MOST COMMERCIAL REAL ESTATE INVESTORS?
Newcomers to the real estate investment field often wish to know the best property type to purchase. Owner-occupied mobile home parks are a great choice. The occupants own their homes, and pay only a ground rental. It is desirable to buy parks with only owner-occupied homes. MH parks with “park-owned” (rented) homes with higher turnover rates and expenses are not viewed favorably by many lenders.
Here are the primary reasons to prefer MH parks to other types of investment properties.
- Everyone needs shelter and along with multi-family apartments MH parks are one of the only two types of dwelling-unit investment properties.
- Many people, over 20 million in the U.S., live in mobile homes. Empty park pads are quickly filled.
- The tenant turnover is lower than multi-family properties.
- Unlike multi-family, undesirable tenants are less likely to affect other tenants since they live in a separate home.
- The park owner is responsible only for the utility hookups, not for damage to the home itself.
- Compared to multi-family, MH Park tenants are more likely to weather financial problems since it is easier to raise the relatively low ground rent than costly apartment rent.
- Unlike the multi-family owner, the MH park owner does not have large maintenance problems such as apartment building and utility repairs.
- When looking for a park to purchase, the entire park can be viewed on Google earth.
- There is less competition to purchase a park. The selling price per unit is much less than a comparable multi-family property.
- Due to low expense to income ratios a MH park’s cash flow is very generous.
- Park maintenance such as utility hookup repairs is very low. Because of this an investor can easily own and manage a distantly located park.
Contact Joseph Spatola when you need financing for the refi or purchase of mobile home Parks or any other commercial investment properties in the U.S. Call or text 856-278-6103
A SIMPLE METHOD YOU COULD USE TO FIND MOBILE HOME PARKS FOR SALE
by Joseph Spatola - President of Barclay Associates
Anyone who has dealt with Joe Spatola over the years knows that he is a big fan of owner-occupied mobile home parks as a real estate investment. He is often asked by investors how to go about finding a mobile home park to buy.
Here is a simple method that he recommends:
First you would have to find the proper town which will be the location of your future park. Look for a county seat preferably of 20,000 or more population.
One of the great advantages of owning a mobile home park is that it does not have to be located in your immediate vicinity. You can buy one 500 miles or more away. All you need is a plumber and electrician in the town where the park is located in case there is a problem with the hookups. You are not going to buy a park if the units are owned by the park and rented to the occupants.
These parks are sometimes called "trailer parks."
Such parks require you as the owner to maintain the rental units, which can be a disaster. Conversely, owner-occupied units in the parks only require you to maintain the hookups for electricity, water and sewer. Lenders also prefer owner-occupied parks.
The town or small city should have a Lowe's or Home Depot and a Walmart or a Walmart Superstore. Lenders do not like mobile home parks or multi-family properties in isolated areas with very little population. You should feel the same way since it is harder to fill vacancies unless you have decent population numbers.
Once you have found a town look for the nearest MOBILE HOME DEALER. They sell mobile homes. They also know all of the owners or managers of the mobile home parks in their areas. Be aware that when they sell the mobile home they have to have a park to put in it. Sometimes the dealers even act as brokers for the sale of the park.
Start calling the dealers in 10 different towns of sufficient size. Get to know the owner of the dealership. Offer him a few thousand dollars if you successfully purchase a mobile home park which he brings to you. Be sure to call the 10 (or more) dealers at least once a month. The first thing you know you will be presented with mobile home parks for sale. This method is ridiculously simple. So simple and effective that nobody uses it. Try it!
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BARCLAY ASSOCIATES - Cherry Hill NJ
MINIMUM LOAN AMOUNTS
Copyright © 1997-2020 JS Inc./Barclay Associates-All Rights Reserved
- INVESTMENT PROPERTIES - COMMERCIAL MORTGAGE LOANS-
Multifamily - $ 400,000 minimum loan amount. ($500,000 minimum if referred by broker.) Multifamily buildings must be 10 units or more. NOTE Possibly can do Multifamily loan amounts as low as 250,000 ($300,000 if referred by broker.) but must have 25% down payment.
- OTHER INVESTMENT PROPERTIES
Office building loans, self storage units, mobile home park financing, strip centers, warehouses and other commercial real estate property loans - $300,000 minimum loan amount ($375,000 minimum if referred by broker).
- RAW LAND LOANS OR LAND DEVELOPMENT LOANS $1,000,000 minimum loan amount.
- SBA LOANS-$500,000 minimum loan amount. ($600,000 minimum if referred by broker).
- OTHER SMALL BUSINESS LOANS (NON SBA)- $500,000 minimum loan amount ($600,000 minimum if referred by broker).
- FACTORING AND ASSET BASED FINANCING These are business loans using accounts receivable, inventory, equipment & real estate as collateral- $1,000,000 minimum loan amount.
- OTHER TYPES OF FINANCING NOT INCLUDED ABOVE - contact us for minimum loan amounts.
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- We DO NOT finance residential properties-only commercial.
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