Having no park owned homes


#1

Hello all!

For those out there that have no park owned homes in their communities, as a result are you not seeing many evictions? Is the rent collection easier? Are you seeing less vacancies? Are seeing some or no abandoned homes?

Sincerely,
Gulliver


#2

All of the above. 1 eviction in about 2 years…when the tenants move out, they sell the home and find me a new tenant.


#3

Do they sell the home to the replacement tenant/owner or you (then you resell it back to the new tenant/owner)?


#4

Yes they take care of their stuff better including payments. If I find out about the sell of the home I try to guide the process (either by telling them what they should try and sell for or buying and reselling on payments) so that not just any yahoo winds up in the park.


#5

Do you think it’s better to buy back the home and then you find / sell it to a new owner /tenant? That way you can do background checks and screen/vet the prospects?


#6

Yes especially if you are local and you have the capitol to do so. Plus if you sell back on payments then that’s more income for you. Just my opinion.


#7

One of our 3 star park of 125 sites 1 eviction in 15 years. We have no interest in owning homes tenants are selling–we collect pad rent–we have no interest being a mortgage company. As usual the higher quality the park fewer problems and no homes abandoned since if there value is less than $15,000 they are removed by owner of home and normally new tenants bring in new homes.


#8

Completely agree with @carl. The money is in the lot rent increasing your NOI/value of price.

If my only goal was to own 2-3 parks that were close together, I might be interested in buying the homes and making a little bit from the sale or loan. But dealing with that crap is a huge waste of time if your plan is to build scale in this industry.

And to answer your question @Gulliver, the tenant finds the prospective buyer and gives me their information. Then I do the background checks and qualify that person, then give the approval or disapproval on whether they move in. I have nothing to do with the sale of the home at that point. My involvement is minimal and I like it that way.


#9

If you don’t approve then what?


#10

For my lease, they must be caught up on rent payments, and I have to approve any purchaser. If they don’t find an approved purchaser they have to remove the home or start paying double rent. If they abandon the home, then I would have to do an abandoned title sequence and end getting the home for filing/court/lawyer costs. Which I would sell immediately to a Lonnie dealer I know and get out from under it.


#11

@Gulliver it has only happened one time, but I would tell the potential buyer that there was an issue with their application. Either their background check or income verification were not sufficient and then I would tell the seller/current tenant to find someone else.


#12

Thank you for the input!!


#13

Here is probably too in depth of a response for the question but here we go…

Generally speaking , i think most operators will always prefer tenant owned homes to park owned homes. Generally speaking there will be less turnover , easier mgmt, less vacancy.

Your question on the abandoned homes is going to go to what the park looks like , its history, the market etc.

What Dominc says is the ideal situation. The tenant sells home, new person buys, all checks out. No lapse revenue. New approved occupant.

This is in a perfect world. And better markets im assuming.

Now there are some other variations to this. You buy the home and go to sell it, thats a whole other ball game… I would never choose to do this willingly. A many a mom and pop parks have ended up as POH parks with this mindset.

Now some people suck at marketing. Their home is not that nice . So whats going to happen? They go to sell the home and you risk getting a less than desirable. Again, you are in a better market, someone sees the opportunity, fixes it makes it better. Your risk is the guy that won’t care about it, they check out etc. Granted the home should never be “that bad” since you are keeping up with the community. But weaker markets , smaller pool of quality applicants. So what do you do ? Well you knock out 3 applicants because they aren’t qualified. The person is probably going to end up leaving you the gift of their home and now its yours to figure out any way. Then you go the decision tree , do you scrap it? bring in a new one? or do you seek to obtain title, repair, now you are in the POH business congratulations …

It happens its inevitable.

Right now i have a house the guy was supposed to sell , we get calls all the time for cheap houses . Dont have anything . I offered we can try and help him procure a buyer and get him to move out. So its within my interest for people to get someone to get a buyer. Because i want that new tenant to take over, fix it up etc.

We are pretty much doing a background check and then income and most will qualify on just a basic lot rent ( assuming the person is buying the home cash…) .

This will alot depend on your specific park, your specific market.

You just have to know the way the cookie will crumble in each scenario so you can weigh your options…

This is based on my experience.

And then i mentioned the history. The one you have to be careful of is where you had an operator go in and do a conversion of POH to TOH but your new owners are actually disguised and are actually renters. So this will have a completely different profile on turn over.

Long term resident owners though , in a well managed park, is what this business is about. You keep them happy, they take care of you.

Brandon always chimes in with a good comments about the weaker markets and your options being more limited. Good markets heal many ales.


#14

May I ask why you charge a “double rent.?” When and how does that happen? After the pad rent lease is over?


#15

That is according to the Florida Statute, for storage fees.
83.58 Remedies; tenant holding over.—If the tenant holds over and continues in possession of the dwelling unit or any part thereof after the expiration of the rental agreement without the permission of the landlord, the landlord may recover possession of the dwelling unit in the manner provided for in s. 83.59. The landlord may also recover double the amount of rent due on the dwelling unit, or any part thereof, for the period during which the tenant refuses to surrender possession.

History.—s. 2, ch. 73-330; s. 10, ch. 2013-136.


#16

I dont understand- what exactly is being “stored?” If the rent is paid…why would that be a problem? What does the double rent go for on your end?
Sorry, I am not a lawyer, but it sounds odd. Do they go through this sort of scenerio in the MHU Bootcamp?


#17

@Shamrocks94 While we greatly appreciate opposing views here on the forum , its what allows all of us to grow. It sounds like you are starting to poke at people in a condescending matter. Opfats is referencing a legal statue while it seems you are looking for a chance to throw him under the bus for gouging. I am just gauging this from your recent posts.

I may be misinterpreting which is always possible on the internet, i fall victim to this also.

I just want to remind you to be respectful to other forum members and your perspective of a tenant is appreciated here for contrast where we may learn, you may learn from us, but has to happen in a mutually respectable manner.


#18

My interpretation is that these are not storage fees, rather the double rent is supposed to be motivation for a holdover tenant to leave so that the landlord does not have to go through the burden of eviction proceedings. The rationale why a landlord would accept rent from a holdover tenant isn’t a topic regularly (or ever) discussed here.

Whether the “double rent concept” is good or reasonable logic is something only the Florida lawmakers can answer…


#19

Wow, you certainly misinterpreted what I was asking. The word choices you used…even the judgements…were not in my mind whatsoever. In fact I appreciated Opfats info, and links, which I looked up.


#20

Thank you for your polite response.