Can I get some suggestions and advice on converting a 20 unit park owned home community to tenant owned? I am OK slowly converting these. Lot rent is about $500. Rent is $1000. Guy I know that does bigger deals just does 10 year AMS at 4% greater than he is getting his homes financed at. But he is not converting.
-15 Year AM at plus 4 my interest rate?
My interest rate + 1 and then a balloon after 7 years?
Here’s the issue I am discussing with possible seller… this deal is about 10% below market and it does pencil as a park owned home community. I live kind of far. If I use a way to convert to tenant owned homes… great… but I need to really provide unfortunate (good terms for me) to the tenants so that when their homes are paid off and I sell at just lot rent… that I am in good shape. Homes are pretty nice.
I am realizing now that this looks unallowable. Suggestions on strategy if it makes sense as a park owned home… I want to convert to a tenant owned home… hmm.
We sell off any inherited POHs as they turn over using a local realtor. Typically cash or bank loan (we make sure to pre-vet a few banks/brokers to make sure they’ll lend in our park so potential buyers have a place to start).
if the homes are older and have no mortgage existing, send a letter to all the POH residents and tell them you would like to sell them the home. Are they interested in being a home owner. Sell them cheap, seller finance. Foreclose if they don’t pay. Move them out, get new screened people in, and immediately sell them when you resell as only TOH instead of POH.
if the homes have mortgages, figure out the cost and expenses and send that letter to those renters and give them the break down of payments
in both scenarios, give notation on the price plus the lot rent and explanation the price will drop down to just lot rent when home is paid off. Some folks need it very clearly laid out.