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PLANNED LONG TERM HOLD REQUIRES A VERY PREDICTABLE FUTURE

A Lancaster, CA mobile home park loan (Los Angeles County) was completed on September 16, 2005 for $1,600,000. Vince Reynolds and Norman Sangalang of MHRV Advisors acted as loan brokers on this transaction.

The mobile home community is an all age, five star park, which has  94 spaces + 1 SFR on 13.8 acres.  Built in 1986, Chaparral is one of the newest parks in Southern California.  Amenities include a pool, clubhouse, playground, and a gated entrance. The park is in excellent condition and the owner is using a portion of the refinance proceeds to completely redo all of the streets. The new $1,600,000 note is at 6.14% and fully amortized over 30 years.

The new mobile home park loan replaced purchase money debt from the owners 1997 purchase and allowed him to pull additional cash out for another park purchase.  Reynolds stated, “We sold the owner this park in 1997 with only 40 occupied spaces.  Since that time the owner has filled spaces and upgraded some of the singlewide homes to doublewides.  He is not a seller so we were tasked with finding a long term fixed rate loan.  The special program that we used for this loan is a full 30 year term fixed at 6.14%.”  Norman added “Even though the owner will probably never sell this park we still had to allow for unforeseen cash requirements.  With this in mind we had the lender commit to loaning additional funds if needed of up to 60% of the parks appraised value while keeping the 1st loan in place fixed at 6.14%.  This is much better than facing a huge prepayment penalty or mortgage backed security loans that prohibit a second with a prepayment lock out.”

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