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Mobile Home Park Investing

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Logan M.
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#1 Mobile Home Park Investing Contributor
  • Investor
  • Provo, UT
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Seller Financing Park Owned Homes

Logan M.
Pro Member
#1 Mobile Home Park Investing Contributor
  • Investor
  • Provo, UT
Posted Jan 17 2024, 11:02

I want to share a quick story about a community with park-owned homes. Many investors in this space avoid POHs but they can be incredibly profitable.

In March of 2020, I purchased a community in a good area with 9 spaces and a single-family home. The purchase price was $600,000.

After about two years I started selling financing the park-owned homes to the tenants. The range of payments for the seller-financed homes is $2,000-$2,330 per month. These are old homes, built in the 70's.


This example is a true story and I've been doing it in other communities we own just not for so much per month. What I have realized though is that I create a massive increase in cash flow over about 10 years and get the park to a position where I am just responsible for the ground and utilities.

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Dave Rav
  • Summerville, SC
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Dave Rav
  • Summerville, SC
Replied Jan 18 2024, 16:21

Though I am in the camp who prefers MHPs with primarily TOHs, I do have some experience with POHs.  

You are right, POHs definitely jump your cashflow.  In your example above, its that 2-year period of exposure thats concerning where you owned homes built in the 1970s and were responsible for maintanance and repair.  That risk involved potentially having to spend more on home repairs than the home is worth.

Also, when whenever we sold mobiles on terms we did so on rent-to-own.  If you seller finance and they stop paying, wouldn't you then have to foreclose on them?

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Logan M.
Pro Member
#1 Mobile Home Park Investing Contributor
  • Investor
  • Provo, UT
590
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718
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Logan M.
Pro Member
#1 Mobile Home Park Investing Contributor
  • Investor
  • Provo, UT
Replied Jan 19 2024, 16:15
Quote from @Dave Rav:

Though I am in the camp who prefers MHPs with primarily TOHs, I do have some experience with POHs.  

You are right, POHs definitely jump your cashflow.  In your example above, its that 2-year period of exposure thats concerning where you owned homes built in the 1970s and were responsible for maintanance and repair.  That risk involved potentially having to spend more on home repairs than the home is worth.

Also, when whenever we sold mobiles on terms we did so on rent-to-own.  If you seller finance and they stop paying, wouldn't you then have to foreclose on them?


 I haven't had to go through the process yet but I believe that Utah wouldn't be too difficult for that. You're also right on the 1970s homes needing repairs.

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Dave Rav
  • Summerville, SC
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Dave Rav
  • Summerville, SC
Replied Jan 19 2024, 17:03

@Logan M. I just know that generally speaking, a foreclosure takes significantly longer than an eviction.  I know the statutes are per-state (and I dont know Utah's), but some states can take as much as 15-20x longer than an eviction.  At least this is the case for real estate (not necessarily MHs)

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Logan M.
Pro Member
#1 Mobile Home Park Investing Contributor
  • Investor
  • Provo, UT
590
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718
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Logan M.
Pro Member
#1 Mobile Home Park Investing Contributor
  • Investor
  • Provo, UT
Replied Jan 22 2024, 09:32
Quote from @Dave Rav:

@Logan M. I just know that generally speaking, a foreclosure takes significantly longer than an eviction.  I know the statutes are per-state (and I dont know Utah's), but some states can take as much as 15-20x longer than an eviction.  At least this is the case for real estate (not necessarily MHs)


 The strategy I have heard used is having in your seller fi agreement that they can't move the home until it is paid off and then if they are not making payments file for them to leave the space since that would still be an eviction. If they can't pay you they can't afford to move their home. In Utah, we can give them a 5 day notice to pay or vacate if they own their own home.

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Dave Rav
  • Summerville, SC
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Dave Rav
  • Summerville, SC
Replied Jan 22 2024, 15:08

Logan,

Great point!  Owning the land gives you another angle work things- land lot rental allows another avenue.  That never occurred to me.