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Whatever your personal credit and financial situation, and belief about debt versus equity there are ways to structure mobile home park deals and gain leverage in a sound and flexible way. If you don’t like debt, even non-recourse loans, then use equity funding. If you don’t like having partners or splitting the pie, then use debt financing. Or mix it up with the two of them.
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How To Understand The Power Of Leverage When Investing In Mobile Home Parks MHIA ALLPPT.com _ Free PowerPoint Templates, Diagrams and Charts
How to appreciate and harness the power of good leverage in investing… Leverage remains the most misunderstood and most underutilized ally for investors today. But it also remains the most powerful tool available to savvy investors who get how to use it efficiently and wisely. There are several types of leverage available to investors and a number of them come into play for mobile home parks investors whether they realize it or not.
This includes; leveraging other people, and the market. Then there is financial leverage. Some fear it like the plague, some abuse it and go broke. Others continue to use it as dynamic force for hacking wealth and income, in a sound and sustainable way. So how much does leverage really matter? What types of financial leverage are available to mobile home park investors today? How are sophisticated investors using leverage differently? What is the right balance of leverage for you right now?
Leverage vs. No Leverage We are all very aware that too much leverage, used in an unsustainable way can be risky. It’s no secret that there is a sizable percentage of the population which hasn’t been taught to use financing well. They are constantly sold on financing deals which end up being more costly and counterproductive. However, there is undeniably a distinct difference between good and bad leverage.
Even the most adamant anti-debt gurus like Dave Ramsey continue to promote real estate financing as the one exception to the rule, and a sound financial move. The bottom line is that financing is just like money. In itself it is not good or bad. It is how you use it.
Ways to Leverage Your Mobile Home Park Investments There are multiple ways to leverage mobile home park investments including: Bank loans Commercial mortgage lenders Seller financing Investor partnerships Friends and family Real estate crowd funding Hybrid combinations of the above
Among these leverage options there are many creative ways to structure deals : Among these leverage options there are many creative ways to structure deals: Lease options Wrap around mortgages Cross-collateralization and blanket mortgages Bridge loans Lines of credit Balloon mortgages
Whatever your personal credit and financial situation, and belief about debt versus equity there are ways to structure mobile home park deals and gain leverage in a sound and flexible way. If you don’t like debt, even non-recourse loans, then use equity funding. If you don’t like having partners or splitting the pie, then use debt financing. Or mix it up with the two of them.
The Pros and Cons of Full Leverage vs. No Leverage ‘Full’ leverage might conjure up mental images of 125%, subprime mortgage loans, but that’s not what we are talking about here. Investors are absolutely wise to build up equity over time, and preserve their flexibility to sell and restructure financing in the future, while increasing net cash flow. Put simply; a plan to achieve full leverage can ultimately provide the best combination of high returns and low risk.
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