I know LD’s are difficult to do in 55+ parks. This is not my question.
Has anyone here transitioned a family park to a 55+. How is that done? What are the operational issues in running a 55+ park as compared to a family park?
Steve
Steve,I have no idea whether or not there are any significant operational issues between one model or the other, or their transitions. The nicest park in our area is a 55+ community. It sports about fifty spaces,is 80% occupied by target clients, and has been on the market for $1.55 mil during the last two years. Although we live in an aging population relative to eastern nations, the desirability of a 55+ community seems to be determined by local conditions and demand. My business model is based on decade- long projections,educated guesses, on economic demand for my area. I particularly like the mid-thirties to mid-forties group with a 2.38 progeny all under the age of ten.This group faces another ten years of high- cost obligations.
Since less expensive accommodations with similar amenities are not available in the most popular school district in our area, full occupancy seems to be favored for the foreseeable future; that is my bet. Also, we discovered that a land-home package featuring a dw creates the most interest with any age group.
I know that I did not,could not, answer your question, but I thought to let you know what works well in our area.
I think that the 55+ crowd, except for bureaucrats and politicians, will find that their incomes will be substantially below their expectations, will diminish.
Steve, the 55+ park entails an 80%? Occupancy of that age group. Conversion would be tough, unless you are near that rate already.
The bigger challenge would to un-convert should you ever need to. As I see it the one advantage to 55+ designations is in marketing, you can tailor your rules and regs to be most appealing to the older crowd.
I believe it is the best group to target as the turnover rate is much lower.
Hi Steve,
I owned a 55+ park in NEO until recently and they certainly have their benefits (think low hassle tenants). When I got into the deal, my partner had already initiated the process of making it 55+ and it is still an ongoing process. We market ourselves as a 55+ and all new tenants must adhere to the age requirements and park rules. You have to be careful how you write your rules and regs for the park and I’d suggest talking to the OMHA attorney to make sure you cover all your bases. One of the negatives is you have a limited buyer/tenant pool. I could have easily sold over 10 homes in the park in 1 1/2 years if we were an all age community. I still think the key to park operations is to have a well maintained park with newer vinyl shingle homes that show well. Older folks in my park took care of their homes and their landscaping which made the park very desirable.
You can still do lonnie deals in these parks, but I’ve found that most buyers use cash from savings or the sale of their original stick built homes. Keep in mind that these folks are going to be living on a fixed income, so payment levels must be kept in check as well. They also tend to have better credit, so 3rd party lenders also work well, which is always a plus. let me know if you have any other questions.
Good luck!
Brian