We recently closed on a park with 15 POH of which 5 are vacant and need work. Demand is very strong in the MSA.
What is the best strategy to convert these to TOH?
Most homes can be sold for around 8-15k
We are considering handyman specials for the vacant POH, and trying the CASH program for the other homes.
Thanks in advance for any suggestions.
I listed mine on Zillow and craigslist. The Zillow people seemed to be the more serious buyers.
I would only clean up the vacant homes if you think they are in decent shape and sell them as is. Then I would also look at the others POH’s and see which ones you can go back to the tenants and sell to them. There are usually a few that the tenants have been in them for a few years. I usually just turn around and strike a deal with them to keep making payments for 6 mo and its yours. Its up to you, but to me POH’s are just not worth it.
I would not sell homes as is as “handyman specials”. You attract the lowest quality tenants and rarely are satisfied with the end result. I put the majority of my money into the exteriors and do bare minimum to get the interior functional. Upgrading the exterior adds the most value to the community and guarantees the work gets done to my standard. The “handyman” owner can then do the interior as they please.
I sell the homes outright, buyers must find financing. I do not offer any incentives or “programs” to buyers. If they can not afford to buy they do not qualify. This insures a higher standard of resident for my community.
It all depends on the end game for your community.
Greg can you share what the average sales price of your homes are? Are your homes newer models or doublewides? Do they meet lending guidelines from Vanderbilt or 21st Century? Or are your buyers going through other financial institutions like local banks or credit unions? I own several single wides that are 30-40 years old and I’m doubtful the usual suspects of lending would approve them for being financed, especially since they would not come with land…I would continue to own the park.
I would sell them as handy man specials if they need a lot of work. If they are in pretty good shape, I’d probably sell on payments. Short terms though. I know you can make more money with longer terms but in my opinion ( and they say it’s worth what you pay for it) your better off screening them well make a little money on the deal and let them have a good deal. I think that long term you are going to make more money on lot rents over the course of time.
My renovated homes are 30 - 40 years old. They sell between 65K and 115K. The buyers are paying cash or qualifying for personal loans. Local banks. They are all single wide’s.
I primarily target seniors and retirees that are for the most part downsizing, selling stick built homes, to free up cash for retirement.
My community has been intentionally transformed from a family trailer park to a retirement community over a 30 year period and has resulted in pushing the value of homes to a much higher level. We prefer residents that choose to live here not those that have no other options. Homes in our community, if well maintained, usually sell within weeks of listing.
To put this into perspective the least expensive new home purchased and set in the community would cost in the range of 100K, on the higher end 140K +. The advantage of new is they qualify for mortgage financing.