What are mobile park loans?
The financing of mobile home parks using a commercial mortgage that is made up of numerous mobile home lots and recreational vehicle parks.
Types of mobile park ownership
- One type of proprietorship includes the borrower owning the parcels on which the mobile homes stand. The land encompasses the following: pools, roads, utility frameworks, club houses, and different amenities. In this type of proprietorship, the owner owns the land with added amenities to attract tenants who will lease out one of the mobile parks lots. In this form of ownership, the owner doesn’t own any of the mobile homes. These investors are focused on creating a stream of income from tenants looking for a place to live in their mobile home or lease their mobile home.
- The other type of proprietorship includes the borrower owning the parcel, all the amenities, and the mobile homes. In this situation, the owner intends to cash flow from the actual tenants living in the mobile homes standing on the property.
Why do lenders offer mobile park loans?
Mobile parks are highly capable of producing a robust cash flow level and return on investment; therefore, trailer parks are alluring to numerous loan specialists.
What are my financing options?
Banks and credit associations offer low rates and appealing manufactured home park financing terms. Non-banks and private money lenders offer greater flexibility with their loan terms to serve borrowers who need a uniquely structured mortgage. Mobile home park investments have a numerous number of alluring characteristics, yet quite possibly the most engaging is the wide range of financing choices accessible to purchase a trailer park.
In a wrap mortgage the borrower accepts the main property lien without informing the bank. This allows the borrower to avoid any type of credit check or bank board.
Master leases are only available for mobile park investment deals. This financing option is tailored for a deal where the entire trailer park is leased out for a certain number of years. The borrower can then go and sub-lease the lots on the mobile park.
Conduit financing / Commercial mortgage-backed securities (CMBS)
These loans are originated at traditional institutional banks but are then sold on Main Street.