I am considering buying a park with over 50% park owned homes. I am wondering how hard it would be to give the homes to the renters for $1 or very cheap. Will the renters typically be receptive to this and want the home?
The most important question is whether you want the tenants. You will need to hold the homes for a considerable amount of time to determine if the tenants are worth keeping and you will need to thoroughly screen them to determine if they have the money and desire to maintain the homes.
The least of your concerns is whether the tenants want the homes. They will all likely take them and when they become uninhabitable simply walk away leaving you with a lot of trashed boxes.
You need to find individuals that are willing to buy the homes so that they have some skin in the game. You will still likely end up getting a lot back that you will need to rehab and resell.
Park owned homes are the curse of the industry and should be avoided. Unless the park is a real steel you would probably be financially better off to pass. 50% park homes is going to cost you a lot of money to carry and off load.
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Agreed. Renters will certainly take the home, along with the attendant price drop. The issue is, will they take care of the homes? Someone with a renter’s mentality very likely won’t. They just don’t have the mindset of “fix it when it’s broken” or, even less likely, “maintain things so they won’t break”. Do you expect them to recoat the roof if a leak is likely, even if it’s not leaking yet? Not gonna happen. And even when the leak starts they’ll likely just put a bucket under it rather than fix it. And then goodbye roof.
I was careful to buy a park with no POH. I did get one, when the owner left due to health reasons. It was a disaster, but I rehabbed it and resold it anyway (will never do THAT again). In your situation, I would plan on notifying the tenants, with plenty of notice, that the homes are going to be sold, that you’d love to sell it to them, but that a down payment of “X” dollars will be required. If not, they’ll need to plan on moving on. The problem then is that they’ll likely trash the place because they’re mad at your making them leave. And it only takes 3 minutes to do $5,000 worth of damage to a mobile.
See why folks recommend not having POH?
:0)
dave
Thanks for the great info