Hi Frank, Install/setup and simple 8x8 deck ono the front and steps with landing on the rear cost $6.5k. We will rebid that. AC cost via a deep discount via blevinsinc.com an excellent source of deep discounted ACs. 3T straight ac + A coil installed is around $2.4k, your discount depending. So total setup including AC is $9.6k all said.
Alabama sales tax is $2k, TruMH does not have built into their inivoice pice a kick back to 21st, that we had to add to the invoice, $1.7k. 21st has 5% kickback to the park. then the points and orig fees by 21st makes up the rest. Then the loan is based on the sum of all fees and taxes which means you are financing state tax, park kick back etc etc etc.
The only way I see to drop the monthly is to do the obvious, the park gives back the 5% kickback, 21st cuts fees, interest rate and possibly stretches term from 15 yr to something longer. I do land-homes on seller financing after 12 mo renting (then long term cap gain AND qualify for installment sale of investment property) so I know a good goal is shorter terms not longer. For my doublewide land-homes I like 14 yr or shorter, but I donât have tons of fees so my mortgatge for a $70k land-home ends up beig $850/mo PITI, 14 yr, for a 3/2 doublewide on land. Equiv to rent for the buyer.
But a $38k singlewide without land goiing for $964 PITI (lot rent $400 + $564 home mort) doesnât make sense for anyone. Our other lot renters are at $360 so we canât solve this with cutting lot rent to $200, we need to be higher then others, so we can cut to $375, the rest of the fix needs to be in the home mortgage.
21st must have had this happen in the past so they gave us a very nice work sheet that we cranked $350-$400 PITI. What was missing was sales tax and all the fees so the work sheet gave a false sense of security that the deal will work. I suggest that folks looking at CASH and playing with their work sheets make sure ALL costs, expenses are added into the cost being financed. Reverse engineering $38k finanal less $22k cost delivered = $16k of costs. Besure you are close to $16k of add ons on top of delivered home cost in your work sheet⊠Ask what interest rate is likely for your buyers to make sure the work sheet is in the right ball park. Iâm not mentioning our buyers loan details intentionally.
In the high AC cost areas - Southern US, bigger homes can hurt value as they are more expensive to cool. Electricity costs can be a real factor in the value proposition of living in your park;
Both banks and insurance companies value aesthetically pleasing parks over those that arenât, maybe even more than they should. When you add a new park owned home, it can make the place nicer;
Insurance requirements/costs for a park owned home vs simply a lot differ significantly. With a park owned home, liability rates are usually about 3x that for a simple lot. Also, youâll have the cost of insuring the home itself which should be anywhere between .7% and 2.5% of the value of the home annually, depending on where you are located.
Iâd like to revive this post if possible! I recently purchased my first park at auction in Nebraska and am looking into the 21st mortgage program as well. I have 24 pads on city water/sewer, but only 4 are filled (previous owner kicked off everyone else). Iâm looking at using the CASH program to fill the other 20 spots.
My dealer prices for a new champion/redman 16x80 home is around 35k plus transportation, setup, skirting/foundation, hookups, fees, 10% split âcomissionâ, etc.
I would also like to know if anyone can answer the other part of the original question in relation to selling the park if you have homes under the CASH program. I have wondered exactly how this program works and if it is really a good idea to be co-signing loans for anyone. My first instinct would be to pass on any park that I found for sale with homes under the program unless the seller kept the responsibility for the loans. I would only be benefiting from is the lot fees as a buyer and the home is already in place.
I own a park in Minnesota and use the cash program. Yes it is amazing how quickly the sale prices rises from the invoiced price of the home. In my experience if I order a new Clayton Wakarusa Pulse home 16x80 that home is $38,000 delivered to my park. Then add another $10,700 for installation (concrete piers), skirting, AC unit. Front and back wooden stairs with small landing cost $1,600. Sales tax is $2,000+. So right there I am at $52,300. Then you have to add the feeâs from 21st Mortgage like the 10% margin on sale ($5,200) and your at $57,200. That is without including electrician and plumbing hookup costs.
So your home for $38,000 goes to $58,000 real fast at least where my park is and my experience.
Has anyone else had the same experience or found a better way to do it?
JCas06 â I also own parks in MN and I share your pain. I do not currently use the CASH Program but I have and do buy homes from Clayton Homes in Minnesota (great to work with BTW). I agree with your comments that the home price from the factory is reasonable, but as you move forward with the transport and installation the costs quickly add up (as you described). Adding to our misery in MN is the lack of movers and installers available to bring in and setup new homes. If you can find someone to return your calls, they will generally let you down somewhere along the way. I have had too many situations in which an installation service, contracted weeks/months in advance, simply does not call or show up for the install leaving me hanging and scrambling to get things done. Same for some movers.
My solution (and Iâll admit I can be a control freak) was to get an MN Installer License in addition to the MN Dealer license. This allowed me to order installation materials from the Mobile Home Stuff Store at reasonable prices (and have it delivered directly to the site). I pay ~$525 for fiberglass steps and allow for the new owner to build a wood porch/deck after purchase if they like. I then have my onsite manager/handyman and me boss around a contractor that can provide tools and labor to get the install done under my installer license. A guy that was recommended to me to do the installation charged about $12,500 to do the install not including steps and skirting (and he flaked out on me at the last minute, and prior to that would not provide an estimate after repeated requests).
So, your $20,000 above and beyond the cost of the home from the factory is very realistic as you laid it out. With three homes under my belt I have managed to reduce that number to about $9,500 per home. This is important in the affordable housing arena, and with solid competition out there. This includes the foundation (footings 24 inch diameter & 48 inches deep), blocking, leveling, anchoring, steps and skirting, but not tax, plumbing or electric. I am trying to work through the plumbing cost creatively as an installer, or with the homeowner; MN allows for the installer or the âownerâ of the home to do this without a licensed plumber (restrictions apply though). As an aside, why the heck do Sonotubes cost so much?? If anyone has an alternative to that, let me know.
