Investor · Lake Forest, CA · Member since 2016 · 7 posts · 0 votes
I'm in the process of purchasing a mobile home park. It comes with 8 mobile homes (most are only 1-3 years old) that were purchased by the park; the park owner holds title to these. The 8 mobile homes are on lease-to-own contracts with the existing tenants, and the homes were positioned to the tenants as effectively being their homes; if all goes well, the tenants will make all required payment for 10-15 year periods, and will gain title to the homes at the end. Though if there were a default in the meantime, the park would repossess the homes. As a buyer, would you require an inspection of such homes?
Yes, you still own the homes despite having RTO residents and you may end up with a fair number of vacant homes due to default. At that point, you'll need to rehab and start the process again. Knowing the condition of the homes and estimated cost to make ithem marketable will be key to your capital planning.
1) Yes, there is no question that you should thoroughly inspect and document the condition of all the homes. Odds are you will get some of them back at some point and have to resell them.
2) You might want to have your attorney review the lease to own contracts to make sure they are SAFE act compliant (unlikely). If the previous owner was using illegal contracts, you do not want to assume that liability. You may have to get new agreements in place.