Mobile Home Park in Colorado

Guess I got a little carried away with my first post so will try to keep this one a little shorter. Going from 1982 to 2008 in one post was a bit much. Later I can go back and do separate blog posts on some of our most memorable experiences with the different types of property we tried over the years.

Anyway to pick up where we left off: We sold our 122-space MHP in NC and did a 1031 exchange into the 129-space MHP that also had 6 apartment units in a large building in the middle of the MHP. The large building had a rather long history. It started out as a catholic church and was moved to where it is today when they built a new church with bricks in 1959. The area was used for a Drive-In Theater for a few years and then around 1963 it became a Mobile Home Park. The building was divided into 6 apartments, a managers laundry room, a tenants laundry room, office and maintenance shop.

When we took over, our plans were to get a small singlewide to live in and run things from the office. With 2 vacant apartments right next door to the office, we remodeled them into one unit for us to reside in. We could step from our kitchen into the office. No being stuck in traffice with that type of commute.

Rumors get started very easily in a MHP. Someone started a rumor that we were going to kick everyone out and sell the land to Wal-Mart. The next thing you know the community block watch commander is in my office demanding to know if we plan on shutting down the MHP or not. Whew what a mess!

We took over management from a mismanagement company out of Denver so had our work cut out for us. Deferred maintenance was one issue. Vacant homes was another issue. On paper they had vacant homes listed as being occupied when there was no one there. We knew going in that the numbers the mortgage company was relying on for the loan determination was all bogus. Park owned homes were listed as rented with nice rents coming in or sold on contract with payments comint in. We really wanted to get back to CO so closed our eyes to these issues to get the loan approved.

The loan was rather tricky! They gave us 60 days to get the MHP to 90% occupancy when I told them it would take me a minimum of 6 months. They wanted to package the loan and sell it on the stock market so it would not be on their books. At the same time they withheld $200K of the loan proceeds. If we did not get it to 90% occupancy in the 60 days they would pocket the $200K and we would still have to repay the proceeds like we had received the funds. Luckily, we had some investor friends from the Pikes Peak Landlords & Investor Group in Colorado Springs as well as some others I had worked with before. They bought up the vacan homes and signed a lease with me for the lot rent. They then would rehab the homes an sell to an end user. We sent in the paperwork to get the money released from the Title Company and they changed the terms in mid stream stating there were too many "investor owned homes" in the MHP. They did not want to return our funds, but the Friday before the FDIC stepped in and closed down the bank we got someone to release the funds as they were already being held outside the bank;s control. Saturday the FDIC took over Indymac and tuesday we received the check from the Title Co that was holding it for us. This loan was brokered by a brokerage out of Portland, OR so after this experience will probably not give them any more business from us.

Then we had to track down owners of the vacant homes and get titles transfered in lieu of back lot rents owed. After getting control of the homes we attempted to sell them as-is, where-is. This did not work out very well so then we had some of them rehabbed and sold them on notes. Today, all but one has been taken care of. The last one will probably be completed this year. The mismanagement company tried for a year and a half to get the titles straightened out for 2 park owned homes, They were unable to accomplish this little matter, so I have given the task to my manager to complete.

Throughout the park there were numerous trees that had not been maintained for over 15-20 years. Some we had to cut down. Others, we had to trim some of the large overhead limbs that could possibly cause damages to people's homes. We were then labeled as tree killers for trying to clean up the MHP. We brought in a street sweeper and cleaned up streets that were three inches deep in dead leaves and dust. The MHP was starting to look better!