What would you do if you already had the land & utilities?

Hi everyone,

Question: What would you do? — Would you sell this development project with owner financing or have the work done yourself and bring what was once a park back to life

35 minutes south of Sioux City Iowa

We already have silly stupid seller financing on this

We would add what we have already put into the development project and seller finance to the next person (if we had to)

6 acres

22 spaces with utilities

City Water & Sewer

Expansion to 40

Old houses cleared

Trees already cleared

Need to put in a road

Make sure drainage is proper

Replace some pads

Fill the empty park

Complete Support from the city

This sounds like the ideal deal. I would go to work bringing this park up to a higher class. Put the road in with a classy entry sign and some landscaping to improve the curb appeal. You can upgrade the spaces as new tenants move in and increase from 22 to 40 spaces as demand and cash flow improves.
This will accomplish your other goal of making it more appealing to buyers down the road if it is appealing to tenants.

If you have the cash and the patients to wait 10-15 years to see a return on investment it could be a viable option for someone with deep pockets looking for the long term end game otherwise sell it as is and move on to your next project. This assumes a strong market that will attract home buyers.
Filling a empty park will see a profit upon sale and a income for the next buyer.

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Why not do a wrap and seller finance to a developer under favorable terms? Probably get all your money back on the down payment and have a nice little annuity covering the original loan. Move on to the next deal. Check that this wouldn’t cause your loan to be called due, but I’d otherwise look hard into it.

Having just looked at a park in Iowa the infill could be VERY SLOW and in the process working capital will disappear.
We enjoy putting lipstick on a good MHP and spending the money to make it exceptional but if the sow is nearly dead there will be a stink—Greg is very correct!!! We enjoy it when new people come to our parks and express the feeling “this is very nice place to live”.

Hi Jhutson,

We are willing to do a wrap and offer seller financing.

Hi Volare71, - thank you for your insight…

That’s the mindset we would love for the person who would be taking over on seller financing terms to have.

With the city support, the utilities there and the ability to expand someone can have a great project.

And as Greg says for the long term. That’s why the mindset and drive to “develop” a park is necessary.

If someone has that with seller financing, we have a win-win.

Hi Carl,

Thanks so much for the response.

Our partner already has a park in the area. She owns all the homes so a different business model. But she is completely full.

There is no shortage of people wanting this park to be up and running, get financed and buy their own home. Then the city is even a bigger advocate. They asked when we got this one done, would we do a senior park in the area.

The stick built homes in the area that are available are older and priced pretty high for the square foot.

With the silly stupid financing we got when taking the park, which is a 1-time payment a year. And with the payment being so minimal,

I am struggling to give it all up and walk away from that piece of the opportunity.

However I appreciate your insight, in agreement with Greg’s, it’s a different type of Long Term project.

As Jhutson suggested…if someone else wants to develop I keep our financing, do a wrap around for favorable terms. A win-win for all.

Decision made - We are offering the Iowa Mobile Home Park Development project, for sale, with Seller Financing.

Love this group, always willing to share their insights. Which in turn moves other people forward.

Thank you again