[CF Student]

CF Student

Hello experienced lenders & investors,
We are looking at a potential lending deal, but it is new to us because the property secured is a mobile home park. We typically lend on SFHs that we would be comfortable owning as a rental if things went south.
An investor is looking for a 1st position 120k loan on a park with 23 units that appraised for 800k. He purchased it for 740k and the seller carried back a note in 2nd position for 400k or so. The seller who carried back the note agreed to subordinate and stay in 2nd.
Rents are about 13k monthly. Some of the trailers need work, etc. But 120k for 23 lots seems pretty secure. Even if a hurricane took out the trailers it seems the 2nd position would work hard not to lose their 400k plus the lots alone would be worth well above our 120k first mortgage amount.

I don’t know, it just seemed easy and safe, but I wanted to make sure I wasn’t missing anything. I don’t think the trailers are insurable.
The current first position loan being refinanced was a hard money bridge loan and we would give a decent rate compared to what that was. If the seller carried note subordinates that makes me feel safe, but am I missing something?
We are getting title work done first, a lender’s policy, etc. 120k secured by 800k, is there something I’m not thinking of.

Thanks you !!

[Dee L Graber]

Dee L Graber

.
Let me address just the insurability question of those mobile homes:

https://www.allstate.com/home-insurance/manufactured-home-insurance.aspx

https://www.progressive.com/mobile-home/

https://www.foremost.com/products/mobile-home/

https://www.geico.com/mobile-home-insurance/

http://www.aarpforemost.com/mobile-home-insurance.asp

https://www.amfam.com/insurance/manufactured-home/coverages

https://www.farmers.com/home/mobile-manufactured/

etc.

–Dee

.

[DON WEDE]

DON WEDE

Joli,
You started out saying that you have loaned before on SFH that you were happy to get the collateral if the loan defaulted. That is the same logic you should use now.

[CF Student]

CF Student

Thanks Don! That really is the key logic to consider.
At this loan amount, or even double it, I would be happy getting this collateral in the event of default.
And it turns out they do have insurance on one of the main buildings that is a duplex plus a laundry room.