Ouch!


#1

One of my tenants has relatives who just came into town looking for a place to live. I have no vacancies now but was trying to help them. One small park in my area had a beautiful mh for sale for 240 days, obviously because nobody could obtain financing. I considered making a low cash offer & renting to these folks. The numbers looked very good but I checked with the park owner to be sure I could rent it. He is a major player in this area with tons of properties.

Bad news. In addition to no rentals (except his of course), the park rules state that when a mh older than 15 years is sold, it must be moved out of the park. So even though this mh is gorgeous, it is 12 years old & nobody with sense will buy it because they won’t be able to resell it in 3 years. As an investor I understand the logic of not having too many old homes in a park, but this seems a bit severe. Most parks say that incoming homes can’t be older than 10 years or so but do not restrict existing mh.

Has anyone encountered this before?

Dennis


#2

How is the vacancy rate in this park? Does the owner sell homes? In my area that was tried in the 90’s and now most of those parks have high vacancy. MH deliveries in most states have gone down 50-80% since 1996. Ky has gone from over 11,000 in 1996 to 3522 in 2007. Where exactly does the owner expect the replacement homes to come from?


#3

The park has no vacancies; all 30 spaces are occupied. I do not think the owner sells homes, only rents them. This park is close to Ft Campbell, KY & the rental market is good so his strategy may be to convert this mhp to all rentals. I guess he wants $450/month rents instead of $125 lot rent. It is a nice neat park, although a bit crowded. As to where he expects the replacements to come from, good question. I am not sure he has thought that far ahead. He has tons of rentals and has done well. He may in for a lesson though since there is another mhp that used to have 250 spaces, then it was reduced to 200 spaces when county water was installed years ago. I drove through this park last week & it looks like there are 30-40 vacancies. It is in a bad part of town & has had serious problems over the years.

I still like the mh for sale. I found a couple of lots in the country with junkers on them & am trying to reach the owner. The mh is so nice & the owners are leaving all the furniture, that I would consider moving the mh.