The wholesale price for a 3/2 singlewide, 16 X 60 ranges from $35,000 to $42,000 delivered. The cost to install piers, lot prep, set home, AC, decks, skirting, electric and gas hook up, insurance and landscaping cost $14,000 for a total of $49,000 to $56,000. The issue is we cannot sell in our market for this amount. I think they would sell for around $35,000.
We have not found any used homes so far because of the cost to go out and tear down and deliver to our park and reset and make repairs as needed. . Most of the used homes are much older and in parks and cannot be moved.
Should we sell at a discount and make up the cost when we sell the park, or should we keep them as park owned homes and rent them out.
How are you obtaining these brand new homes? A dealer? 21st Cash Program?
First step: What’s the MOST your average customer is willing to pay a month? The resident cares far more about the MONTHLY cost than the TOTAL COST. Find out this exact number by running test ads and checking comps in your area for brand new homes.
Second: An important detail many operators miss is that the more expensive homes (even double wides), can have longer amortization plans, meaning they will be less costly on a monthly basis, usually. Alternatively, sometimes you can get a MUCH nicer home for extremely little on top of the monthly cost and sometimes people will budge on that, because they’re getting such a nice deal on a very nice home. But if it’s the basic model, they may not be as compelled.
Third: You can actually shop around for some of these things. Try to cut costs. Can you save money on install? Is there alternatives for skirting? Can you find them a cheaper insurance to reduce monthly costs? Try to find somewhere in the loop that you have control, where you can cut monthly expenses for the customer. This can go a long way in making it happen.
Lastly: What if you match the customer’s down payment towards their home? This would be extremely attractive to them, and promotes them to have more skin in the game (since the bigger the down payment is, the more they save!) From an operator perspective, the value you add to your property by doing this makes it a total win. Adding a paying lot to your park adds tens of thousands to it’s value, and it could only cost you a few thousand to do so.
New home prices have gone through the roof. But, so has retail demand in many markets. If you’re in a decent market, it’s possible you’re underestimating how much demand has changed over the past year. Homes are more expensive to buy, but you may be able to sell them for more now too
Raw material prices have gone up a lot in the past several months. They may come down in the coming months. If you wait a few months, and contact multiple factories and really try and get a lower bid, who knows maybe you will get something better than what is on offer now.
I have always looked at a vacant lot as money that I will never get back. Agreed homes cost too much, however, you’re not getting anything from empty lots except maintenance costs. Put a home on all of your lots as quickly as possible. Our mobile home demand will change. Its easier to lose 20% off of 100% occupied versus 20% off of 50% occupied. Be prepared for a down draft in mobile home desire with a fully occupied mobile home park. Things are always changing.