Hi I recently toured a park that is for sale and discovered that while the park is in tremendous condition and in a strong market, the seller has 43 park-owned homes out of 107 sites. While many of the homes are either new or less than 15 years old, the owner finances about 20 of them personally with the tenants, not through 21st or a bank, but himself.
% of park-owned homes aside, how concerning is the financing? The park is in Wisconsin and I don’t know enough about laws here to know if this is legal.
On another note, all of the landscaping (mow lawn, trim trees/bushes, etc.), snow removal, and much of the park-owned home repair is done in-house. How much would you assume for snow removal and landscaping if it was outsourced to a 3rd party?
If I remember what my wise ‘Uncle Frank’ said, only use the lot rent to calculate the NOI. Or something close to that.
Regarding the ‘legality’ of the POH’s financing arrangements, you’d have to read the documentation yourself. Then get a Wisconsin legal opinion. Or take it to the state’s MHP association for assistance.
On the seller financed homes, the seller may have sold them prior to Dodd-Frank taking effect. Or not.
It may be a complete disaster. It may be the cleanest deal on earth.
Only due diligence will uncover the truth(s).
Regarding landscaping issues, get bids from local contractors. Ask others on this forum for references. There is much knowledge and information available from experienced, professional MHP owners here. It’s the best resource in this asset class.
Hi there, after you have done your due dilly as per mhmike above another possible solution…create 2 separate purchase agreements, 1 for the park, you get the loan on the park if required and 2, one for the homes where the seller carries the note?
Just a suggestion.
Cheers,
Gerrard.