It almost never fails that any mobile home community you go to will ask that you fill out an application prior to purchasing an individual mobile home inside the park. Every park will have its own approval process, and every park will have criteria to meet before a potential resident buys or rents a home there.
If we take the side of the park manager and park owner, it is very wise and prudent to know exactly who is moving into the park. Is this person a murderer? A sexual predator? An eviction-prone tenant? Or just a regular bill-paying, credit-conscious, hard-working home buyer?
Below are three common mistakes that mobile home investors and/or home buyers make too often.
3 Costly Mistakes Investors Make With Mobile Home Park Managers
1. Being Dishonest
You will be a stranger to most park managers when you first meet them. If you begin your relationship with any type of lie, you risk ruining the entire relationship forever. Remember that park managers will oftentimes run your background, credit, eviction status, job history, etc. before approving or denying you as a resident. Be honest! Otherwise, you will get caught.
Be honest and up front about your past. If the crime or offense is violent, you may have to understand most parks will simply not want to even try to work with you. For most of us, however, less-than-perfect credit or a past bankruptcy is not a death sentence from mobile home investing in parks.
When you are proactive in telling the park manager about your past, there can often be ways to work around the issue. Perhaps a co-signer with better credit can be on the lease in addition to you, or perhaps you can make a double or triple deposit to put the park manager’s mind at ease should you default.
Try not to explain for more than 10 seconds why your poor credit is the way it is. Park managers have heard emotional story after emotional story from potential applicants. Embrace your past and sprint forward.
Some parks will understand you are an investor and may only wish to take your business card, while other parks will want to know everything about you and your future purchasers. Make sure to know what the park screens for on your background check and that of your buyers. If the park is too strict, you may want to reconsider investing inside that park.
2. Failing to Get Approval
It never fails that I hear about a new and unaware mobile home investor or buyer who did not know to get approved at the park office prior to purchasing the mobile home from the seller. Next, the investor went to the park office to say hi and now there is an unexpected problem. This often comes up due to a few reasons:
- The person you just purchased the mobile home from owed back lot/pad rent and late fees.
- The person you just purchased the mobile home from and the actual mobile home are now being evicted by the park.
- The park has rules that state any new home owner has to install new decks, siding, and a shed within 90 days.
- If you plan to move the home, you must give the park 60 days’ notice. This is only a problem if you plan to remove the home from the park.
- The park does not accept minors living in any of the homes, and this is unrealistic for many of your buyers.
All of these have been experiences from others within the past few months alone. Whenever I hear this, I cringe because it most likely means a seller lied or misrepresented their situation in order to sell their home for more than it’s worth. With regard to past-due payments, most parks hold the new owner (you) responsible for paying the seller’s past due amount as soon as possible.
3. Not Maximizing the First Impression
There are more reasons to seeing a park manager prior to closing than just saving money, making more profit, showing respect, following protocol, and knowing what you are truly buying before you purchase.
When a park manager knows that you know the rules and know how to follow directions, it can really help the relationship start off on the right foot. Think of a park manager as a friend you haven’t met yet. While some park managers are firm and others are goofy, it is your goal to leave the park manager’s office knowing a few things:
- Whether you have their permission to invest within the park
- Whether they understand your plan and know how you plan to help their community
- Whether they know what types of properties you’re looking for
- Which homes are for sale by the park and which homes are for sale by owner-occupants within the park
- The park rules and applicant screening criteria
- Additional park information
First impressions are so important when it comes to meeting local park managers face to face. Keep in mind that many community managers may live in the park, as well as manage it. These park managers should like and trust you from the beginning. A good recipe for this is to do what you say you are going to do.
Be polite. Remember that working with park managers is infinitely easier than working against a park manager. If you simply take a humble attitude and remember to first speak with every park manager prior to purchasing any single mobile home in a park, you will avoid many of the unforeseen problems above.
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Note By BiggerPockets: These are opinions written by the author and do not necessarily represent the opinions of BiggerPockets.