No pressure, Greg, we would be happy to help out at MOM, as always! It is such a great meeting, and has been since the very first one. No one should ever leave there, (or MHM for that matter) not having met very involved people who are always willing to help and having more new ideas than they know what to do with.
Jim and I left the last MOM headed for a park that we looked at and actually attempted to put under contract with others that were there, but that one did not happen. The park we bought was on Loopnet, listed for much more than we ended up paying. Apparently the owner had previously turned down higher offers than we made, but was more motivated at the time we were making ours!
I am sure we will have lots to tell. In the meantime, Jim picked up our new sign yesterday and has begun park cleanup. Most of the excess cars are now gone, and most are now parking off the grass. We have bought some repo units that were in the park and are getting these ready to sell along with some rental units the previous owner had. We have learned that the bank we are doing business with in Alabama will put a hold on checks we deposit (investment funds) over $2,000, but I can walk into the same bank down here and deposit without a hold. That keeps our cash flowing smoothly for purchases.
Unfortunately, one of our best tenants moved his home out of the park this week because he had bought property to put it on, and another good one has told us she plans to move hers out by the beginning of the year. The one who moved out was our resident cop, so that makes it even worse.
In the meantime, back here in Florida, I am struggling with people who have bought homes from us here and are having financial difficulties. We have actually recontracted two of our customers who were paying well and all of a sudden were not paying at all. Apparently the major increase in prices are making even low-cost housing more than they can afford. Electric bills have skyrocketed this summer and as we all know gas has increased as well. The lowest lot rents in this area are $326 per month, their insurance on the home is $30 per month and the $250 payments have now been lowered to $200. Of course, this will add a lot more payments on the end.
Also, in our opinion, this park (that we have several homes in) has deteriorated over the last year, with the new company that bought it bringing in old dogs from closed parks to the south, setting them, and selling or renting as is. We have a home in there that our buyer left and has now been for sale for a month, longer than we have ever held one before. One of the major issues on this is that the park is charging $75 for each adult for the credit check and is taking a week to get it back. I have had potential buyers flat out say the $75 is more than they are willing to pay, and the $150 for a couple breaks the bank.
Are others running into this, or is this specific to our area? Although Greg and I are both in Florida, we have totally different markets. The other thing that I am seeing on this coast is the single family home rentals are abundant and rental prices are actually decreasing although insurance costs and taxes are increasing. (Taxes are going up about $500 on our lower priced SF houses this year!) The reason IMHO is that so many “investors” (speculators?) got involved with new constuction and have not been able to sell the home so are renting it at or a little above their interest only mortgage. I have actually had potential renters tell me they could rent a new house for less rent than I am asking on one we have had for several years and had no problem getting the rent previously. (This might not work for them too much longer, either, since they recently got their TRIM notices, but if they are tied into a lease they will now lose money.) We just sold a house that appraised for $285,000 for $246,000, but had a lot of room to move and still make money.
I see more and more potential for true investors as dominos start tumbling for those who entered the speculator market as well as for those people who jumped for the low-price adjustable rate mortgages or interest-only mortgages as homeowners, and will be unable to make their payments when they adjust. Those people will become mobile home customers in the future, I think. As Greg said in another post, when one door closes another opens. If we are ready, we can help people and make money at the same time.
By 2008, Ellen and Jim will have their new “baby” looking like a country club!