Trying to get a feel for what people are seeing for all-in monthly payment for a new TRU mobile home (and more specifically in a very strong MW market to the extent possible) through CASH program. Lot rents are currently $250 for existing TOHs. I’d like to push to $300 or more lot rent on new homes, which would support a $21k “invoice amount” on the home and a $650 total payment (reps say very doable with TRU 3BRs). I know the test ad will likely provide the best market info, but I’m curious what the demand/price delta has looked like for others for new vs used homes in their parks. Seems anything less than $700 is pretty conservative so may have some more room to push lot rent.
100k+MSA, $175k median home, $750+ 2BR, $1250+ 3BR
We have a park in Atlanta where our market statistics are not as strong as what you have and we rent 2005 3/2 homes for $650 with no issue. We also have a park in Petersburg, VA where we have pre-hud 3/2’s rented for north of $600. In my opinion, a $700 payment would likely fly in a market with that type of housing cost.
What seems to work for us the best is being patient. We are very selective with our tenants. We recently closed on 2 parks a month ago and we’ve marketed hard on these two. (Facebook, craigslist, bandit signs, etc.) The three residents we’ve signed up have the following jobs: 2 are nurses and the other is a middle school teacher. All three have good credit and all three are very motivated to own the home (1 paid $4,000 cash for a handyman special). Throughout this effort, we’ve turned away about 30 people. Looking at these three applicants, all three have both the financial where-with-all to afford a $700 payment for a new home and all three have the proper motivation to perform.
Tip of the day would be to really select a great resident for your pricey new home. You should feel confident that you’re handing those keys over permanently.
It’s city water and sewer and no POHs so I’m assuming I shouldn’t be deterred by an unattractive going in cap given the massive upside. All comes down to the market being bulletproof as we’ve discussed but this is the first “turnaround” I’ve looked at so am naturally a bit hesitant.
Without knowing anything about the deal I really couldn’t tell you my thoughts on it. The only thing we’ve established is that housing is expensive so it seems reasonable that a new home could fetch a slight premium. What attributes about the deal make it a turn-around?
I would likewise look at a used home infill. This is just my personal opinion, but I’d rather push for a cash sale from a quality resident on a used home rather than infill most of my lots with homes that will have mortgages attached to them. I think a nice mix of both strategies may be the best option.
This is relatively large scale so that route would make this much more complicated, and bring with it financing complications that I can avoid entirely with CASH. Kind of a double-edged sword I suppose. I understand the risks on both ends.
CASH Pros: Can fill quickly, SAFE act compliant, 0 down, should be able to manage remotely with competent person on ground
CASH Cons: Guarantor, higher priced homes / higher default risk (although now 15 year am)
Used home pros: Cheaper homes, lower risk of default
Used home cons: Inefficient on larger scale, potential over-exposure to handful of lonnies, equity component
Good news is that they’re not mutually exclusive and can figure out on the fly but would rather solid plan going in. Frank or anyone else that’s bought a large park with 50% occupancy looking to fill 75+ lots – is your gameplan to fill entire park with CASH homes? Has recent move to 15yr am impacted decision making?