i spoke to a dealer about similar situation, who said they would gladly place new homes on lots and sell them from there. Sounds like a decent deal besides waiting for its sale and not having any say on who occupies your park. Otherwise letting dealers know of your lots or used mhs to rent to own seems to be the only way. If your county allows what about tiny homes or rv's?
@Will G. can you direct message me with some info on the dealer you are referencing? I have a park that would be a great candidate for this. Thanks!
@Greg Tawes Unless you're in a hot market where demand is high, most park owners have to bring in their own homes (either used or new from mobile home dealers). You may also try to find an investor who can bring them in but you'll have to offer some concessions (i.e. free lot rent, moving costs paid, etc). Good luck!
you could also try the CASH program thru Clayton....there are some specific's that you and your park have to meet...but its worth a shot. Mobile home financing is starting to get a little bit better...but like @Rachel H. said, most owners have to bring in new homes themselves
Thank you for your responses. I need to budget that cost in my capital outlays. I'm thinking perhaps I buy a couple and get them rented / rent to own and then gradually in fill in the remaining vacant lots. I am familiar with Clayton Homes, but I'm not sure what the CASH program is??? Also, any idea what it would cost to move and set up a mobile home say 50 miles. Just trying to guesstimate.
I'm also looking at another park with 21 lots and some 30+ year old units. Average age is probably 20 years. It's probably 80% renters. It's 100% leased, but there is some turnover I'm estimating 12% vacancy. I also estimated $500 per unit in maintenance. Do these figures sound reasonable? Draw backs are the age of the units and very small lot sizes. It feels much more like a classic mobile home park vs a neighborhood.
Mobile homes if taken care of, can last 50+ years with no issues. depending on the market, 1 bedroom mobile homes are a lot harder to fill, even with senior citizens and single people. 2 bedrooms are always better and 3 bedrooms are the industry's most sought after units. As long as the older units are taken care of and show pride of ownership, the park can still be a profitable park and can be held for years to come as the shortage of available affordable housing continues. The smaller lots could be a problem, just evaluate it as such and the potential for reducing number of lots if you need to bring in a newer/used home. be sure to check the setbacks, etc. that the city dictates.
Typical moving cost are around 4-6k to get it moved, set up, tied down, etc. contact a couple local movers and get quotes. easiest thing to do.
CASH program is the program that clayton homes runs for new and used units and financing them. There are some caveats with it, but theyll let you now what those are.
Originally posted by @Greg Tawes :
I have a question, I'm looking at a small park in a rural market (maybe 30 lots). There are about 15 vacant lots and 15 with mobile homes. Do you ever have to bring in the homes yourself for spec? Do you buy them all new? Will the manufacturer typically provide financing to the landlord for these?
I just don't think I'm in a dense enough market for folks to see a vacant lot and decide they are going to go buy a trailer to put on it. However, if there's a decent trailer already in place I think a rent to own scenario would work.
Any recommended strategies?
New homes attract more and better buyers faster. If you need 15 new homes there are some manufacturers who will treat you better than others. Regarding inventory financing, some manufacturers will, and some won't. The CASH program as mentioned earlier is one example of a method of doing this, but there are many others. What works for one, others will shun, so give real thought to what you really want and need in the way of inventory financing, and then examine the trade offs.
Many community owners use outside investors, others use private individuals as lenders with you as the commercial borrower. There are many institutional lenders out there that are also interested in this. At least one will loan you the money to finance inventory and then loan (if you have one) your captive finance company the money to make loans to the the purchaser of the homes with which the inventory financing is paid off. There are also private individuals who routinely lend money to captive finance companies to make these loans.
Be careful with rent-to-own. Make sure it is legal in the state your park is in. Also make sure that you have your compliance management system is up and running before you start this. There are better solutions than RTO out there. As someone else wrote, more and more finance companies are springing up so if you are headed toward new homes you may not need anything else.
@Greg Tawes I'm in the same boat as you. My park has 31 vacant spots.
Cash program wont work for me because they want to see 2 years financials and I don't have those.
I'm bring in 6 brand new Clayton homes that are financed 15% down plus moving and set up. Puts me at about 25% down total. They will be brand new and like @Ken Rishel said they will attract better buyers.
BTW the financing on that is private no banks or institutions.
My second plan of attack and really the more profitable one is going around to all the MH dealers and setting up a great incentive program for people that want to buy a new home and live in a great park. It seems like you and I are facing the same issue. This will include a reduced rent for 12 months or so and to sweeten the deal I'm looking to pay some amount of money to help with the setup and moving cost. Haven't landed on a number but the way I figure is if I throw a $1000 at helping them move a nice home into the park I'd have my money back in less then 6 months and that thing isn't going anywhere for a very long time. I hope that this gives you a couple of ideas. I've been working at this for sometime and would love for this to cut down the time for you.
Look into Legacy Mobile Homes. They have a park program where they will finance the homes for 15% and put the homes in the park's name.
Let me know if you come across any other kind of programs on your search. I'm excited to see that mobile home lending is getting easier.
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