Handyman specials

My understanding is that handyman specials, where the park sells beat up trailers for very cheap to tenants who want to fix them up, are generally a bad idea. You tend to attract dirt poor tenants who are desperate for some place to live and don’t want to actually fix it up, plus you have to be concerned about violating laws regarding the sale of unsafe housing.

Right now I have 7 beat up trailers in the new park I purchased and have had many inquiries about purchasing the homes via a handyman special. I was thinking of offering the following (fairly ungenerous terms):

-If the applicant passes the resident screening process, the applicant can then put down $200 and get an option to purchase the house after they have fixed it up. After paying their $200 deposit, they have 60 days to work on the house and to get it to meet minimum habitability standards. They do not have title to the house, and any overnight stays in the house are considered trespassing and grounds for arrest. After full repair of the house, they can pay $100 to exercise the option and purchase the house with clear title.

Does the above look reasonable, or just a head ache not even worth bothering with? I don’t know if a tenant would ever agree to unfavorable terms like these anyway.

We have had mixed results with a similar strategy. We usually do a 12 month contract for $100/month and waive the first 2 or 3 months lot rent while they are fixing the home. Your strategy will depend on how many homes you have backlogged, market demand, and if you have good rehb guys who could turn the homes quicker than doing the handyman deals. You also have the issue of construction trash in the yards while they are rehabbing. Dumpsters and trash hauling can get very expensive. Overall I would say, just fix them up with your own crew for retail sale or rental.

Bret