This is the crux of why you don’t want to factor in the “future potential” when buying a park. Purchase for an adequate return on current numbers. Filling the park is the whole name of the game and it is where the “business” side of the business comes in.
I agree with everyone who said you have to bring in your own homes – it is rare someone else will put a home in your park for you (without you having to do anything). You can offer “spiffs” (free lot rent, etc) to the local dealers or go through the used/new process.
One thing I haven’t seen mentioned in this Forum too much is the difference between buying used homes and buying new homes – there are a lot of comments about how good it will be to buy new homes (with factory financing – little out of pocket).
Here are some problems with the used home strategy:
(1) You have to be an expert in all aspects of obtaining, transporting, installing, rehabbing, and marketing a used home.
Here are some problems with the new home strategy:
(2a) You have to be an expert in marketing to find prospects that will qualify for outside financing and not leave you in the lurch (will fulfill the 10- or 15-year contract). High demand doesn’t mean they’ll qualify for financing.
This takes significant time and aggravation (and perhaps some out-of-pocket capital besides – for down payment or whatever the factory financing doesn’t cover). You also have to coordinate with the manufacturer and the finance team which can be a hassle.
(2b) You may not find out that you have been left in the lurch, so to speak, until a year or two down the road. Or five. If the customer defaults under these new home programs, you are taking whatever loss exists, not the manufacturer or the lender.
(2c) Once you have been left in the lurch, you are back in case 1.
(2d) You are probably out more money in this case 2 because you have essentially purchased a “new” home to rehabilitate and sell it as “used” after you run into your first problem tenant.
So, you might think about biting the bullet and figuring out how to market used homes to begin with and there will be (perhaps) equal work but less risk.
Just something to think about.