Tear-down Mobile Homes: best way to replace

mobile home university
1

Hi all,

Our park in FLA has 15-20 unoccupied spots with tear-down mobile homes. Opinions on best way to replace the homes so we can start renting out the spaces again?

  1. Buy new MH’s and sell them to new tenants?
  2. Buy used MH’s and sell them to new tenants?
  3. Buy MH’s and lease-to-own to tenants?

Thanks!

2

Conventional wisdom still says “buy used and sell them,” but it will depend on how much equity you have, how many used homes are on the market in your time frame and what your tenant base can afford.

How would you answer those questions?

3

Does your municipality, if applicable, have any age restrictions on used homes (e.g. 2008 or newer)? That can influence cost quite a bit.

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It depends on what your market can support. I would rank as follows:

  1. if you can buy new and sell them easily, that is best. You will have nice homes, pride of ownership, and a great tenant base. Setting up a new home is much easier than used because everything works.

  2. If you cannot sell new, then sell used. Your workload increases dramatically because now you have to refurbish used homes.

  3. if you cannot sell used, rent-to-own. You will have to refurbish and hold the risk when tenants default, meaning you may have to refurbish over and over again.

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5

Also be aware that buying used and moving in means a lot of banks won’t touch financing a home because it isn’t the first move location. What part of Florida are you in? I have a guy that has filled my park with homes (7 used homes) over the last year. I’m in the Tampa area.

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Hi mPark,
Yep, that is pretty much what I was thinking. Less capital outlay if the tenants are able to buy the home and more risk / maintenance if owner owns home. I like that new homes look good and encourage a good tenant base. Also, if they last as long as the homes that are falling apart now, we should still be able to have tenants in them until 2085 or so :slight_smile:

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Hi Opfats,
Thanks for the reply. We are in the Tampa area as well, any leads you might have on good quality used MH’s would be great! Many thanks.

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Hi Opfats,
Our park is in Central Florida and I’d appreciate any leads on used mobile homes that you can send, we’d be happy to pay finder’s fees. My email is UnionCapitalGroup2015@gmail.com Thanks.

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Southern Comfort MHP was recently shut down in Clearwater due to water issues. Many homes were left in the community. Might be an opportunity to buy some of the homes at a good price.

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ORIGINAL POST IS 7 MONTHS OLD, BUT I AM REPLYING FOR THOSE THAT MIGHT HAVE THE SAME HURDLES.

If your park had less tear downs, you might find a dealer that would place a home in your park as a model, working toward selling some.
If you buy new homes, you will have a big monthly nut to deal with if any of them sits. You also have to factor in protecting the home from thieves, etc. I know of a develpment where they new appliances would walk out the door as soon as it got dark. I would see if there is an association of park owners that you can tap into. (although many feel compelled to “hide” their trade secrets.
Look at it practically. With the tear downs, what do you have to entice a new home buyer to want to live there? Are you putting a diamond in the coal bin? when you rehab a house, you try to duplicate the homes in the area, with slight upgrades, based on your buyers market. If your park in a C or D, you don’t want to over improve a home because you will never recoup your investment. The condition of neighboring homes will effect the sale price of the ones you are trying to sell.

  I recenlty tapped into a new home dealer. He calls when he has a trade in. If they are older or need work, they don't want them sitting on their sales lot with the brand new ones.  I am getting one delivered on the 19th.  $1000 for the home. Needs the standard wood replacement under the windows, and carpeting.  Other than that, it's livable and pretty nice.... vaulted ceiling, open floorplan. They are working on a deal on a double wide and are estimating my price on the trade-in at around $3000. 
    I will be selling the park in the next twelve months so I plan to sell these homes. Like realtors do, I will work with my local bank to find out what their rates and requirements are, so I can point buyers in that direction.  The less obstacles buyers encounter, the better your odds of a sale.
    We once rehabbed a house... the buyers got jammed up on their financing. We sent them to our lender who wrote the loan in 2 weeks. They had other issues to deal with... we referred them to other vendors.  They were thrilled. We didn't get anything out of those referrals, but we got the property sold, and had vendors that would go the extra mile for us in the future..