Is it better to fill lots with new homes or use rent credit on existing 90's homes


I am looking at 2 parks with similar economics.

The big difference is one park has several rented lots and 15 90’s era rental homes in good condition.
The other has several rented lots and 15 vacant lots to fill.

Assuming all else is equal, which is better to purchase?

It seems I could sell the 15 rental homes faster, but would have a lot of maintenance and turnover for several years.

Filling new lots would take maybe 3 years if I sell 5 a year, but I would not have to carry the note.


Couldn’t you sell the 90’s homes as seller financed deals? You could carry the note and collect just as much as a rental income on it without the expense.


@Toben, Do a valuation for each park. If I understand you correctly, the park that has more rented lots is a better option.

To be clear, lets assume some very rough numbers:
Park A has 45 occupied lots. 15 of which are POHs. That’s arguably a $900K park.
Park B has 30 occupied lots. That’s roughly a $600K park

If all other things are equal, including the price, then it is pretty obvious Park A is a better buy. Otherwise, perhaps you can share additional info to compare.


A better analogy is the following
Park A $8000 rent roll from lot rent and 15 vacant lots to fill in a high demand environment
Park B $8000 rent roll from lot rent and but that includes 15 rental homes with another $3000in rental income on top. So the the money coming in is higher until I get all the homes sold off entirely. However there are no vacant lots to fill.

I guess Park A is better as it has a better future.


I took another guess from the additional info you provided to show that an apples to apples valuation is needed in order to answer your question. I also switched my original Park A and Park B assumptions around to match what you are calling Park A.

As you can see, if you give value to the POHs, then you’ll conclude Park B is a better option. Consider you can recover some investment money from selling these (either rent to own or using 21st Mortgage’s CASH program for used homes).

However, if Park A indeed has more lots, though 15 of them are empty, then you can increase the value of the park significantly. This requires money and effort.