Mobile Home Park - Sell Off POH's???

Question

I recently got a mobile home park under contract that includes 20/39 homes to be park owned. Does anyone have any experience or insight on the best ways to sell the homes off to the current tenant and successfully increase lot rent?

Jack Yen · Answer

hey @Alex Johnson congratulations on the MHP acquisition! I am in a similar situation that purchased an MHP with many POH. I'm doing rent to own contract to the current tenants that I feel fit. I'm also exploring selling to investors but just need to be cautious on who you sell to. For me it's kinda trial and error and I'm still learning. But I feel rent to own might be the most straightforward and increase your NOI right away.

Dominique Vescuso · Answer

I would do a lot rent survey of the parks in the area. Then gift the mobile homes to the tenants and set their lot rent $25 above the highest park rent, assuming it is lower than their current rent. They are happy since their payment went down and you have lots at full lot rent.

Hai Loc · Answer

Yes put all the POH tenants on a payment plan to own the home.. just collect the lot rent.. they can do their own maintenance

Jack Yen · Answer

Hey @Alex Johnson, every park is a bit different and a few things to consider to customized your business plan for your park, tenant demographics(how much you want to sell vs how much tenant can afford), historical collection/delinquency, market lot rent vs current lot rent, and probably most importantly, is it a long term buy and hold or rather a value-add and exit deal? The park I mentioned that I have many POH, in that are it was difficult to find a tenant that are interested in buying, it was more a renter's market. So it took us a while to get out business plan going, but I think it's always worth to do some trial and error and you can see which one work the best. If you have a local meet up group, also reach out to other MHP owner in your area as well. I hope these helps!

Alex Johnson · Answer

@Jack Yen Great info thank you. It sounds like rent to own is the best fit. If a tenant is not suitable for a rent to own scenario, would you agree the best solution is to hold a potentially short vacancy and find the correct rent to own prospect? I have also contemplated the fact of 100% deeding the ownership of the home over to the tenant with the agreement in place of new lot rent price, and 5% escalator per year in rent...possible 10 year term on the 5% and after 10 years the escalator would be brought to 3% annually. I am interested in your thoughts on that.

Mobile Home Park - Sell Off POH's???

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