The Madison Group (TMG), a leading
source of mobile home park financing nationwide, arranged the $1,750,000
refinance of a mobile home park in Tacoma, Wash. The borrowers’ goals were to refinance a note
which was due and secure long-term financing. TMG arranged a 10-year fixed rate
loan at 4.95% and a 25-year amortization at 70% LTV.
The well maintained park consists of
40 double-wide pads, one manager’s unit, two RV pads and one duplex. It is 100
per cent occupied and in a good location with high rents. All units are tenant
owned. The property is operated as a
senior park for tenants 55 years old and older. The same management has been in
place for 20 years
TMG needed to overcome a number of
challenges in order to secure the financing. Most significantly, the property
was originally financed on a seller note because the mobile home park needed a
new sewer system. The system was
completed and TMG was able to finance the new permanent loan with lower sewer
expenses because of the new system. Additionally
a portion of the property was located in a flood zone and the county recently
imposed strict flood guidelines posing more risk for a lender. Lastly the
borrowing entity consisted of five tenants in common, complicating the
paperwork.
In order to succeed, TMG worked with a
local credit union that understands mobile home parks and is comfortable with
the market for this type of park. The
credit union was willing to resolve the flood issue and work with the multiple
borrowing entities to complete an excellent long-term loan for the owners.
“All of the concerns that were initially addressed were satisfied,” said
Angela Kesselman, TMG’s associate director of Finance. “We
were even able to have the prepayment penalty waived and the loan assumable to
a new buyer to accommodate one of the aging owners. We found the perfect fit,” she said.
The
financing was arranged by Angela Kesselman at The Madison Group