I wonder if any of you have tried 21st Mortgage’s CASH used home program where you sell a POH to a resident and 21st Mortgage bankrolls it – or if any of you have some thoughts on it.
I would love get my capital out my POHs and get out of the home rental business. But I wonder if a typical renter would willingly make the switch. The typical POH’s total rent runs $500 to $550 so I don’t see a huge amount of room savings for the renter turned owner.
Anyway, I would love to hear your take on the program.
I agree with Greg – at some price point of course there will be demand from interested buyers. What “capital” are you seeking to get out? If you “capitalize” the income stream from a home, how much is it worth to you to keep as a rental?
It does not make sense to us to “give away” homes for (say) $500 or $5000 because it’s the same as renting by the time you’re done with it, except you have more hassle to reclaim the home and/or it can be legally moved off the property. I know a lot of operators sell “handyman specials” but that isn’t our model. We try to sell at a fair, but reasonable, price, or keep renting.
I have something like $175k – $225k tied up in POHs. That is the capital I would like to free up. I can’t see that I make much of anything off of them other then lot rent.
Also the POHs are the biggest source of hassles in the business – people moving in and out, leaving a mess behind, being on the hook for repairs, dealing with shoddy handymen, etc. I know MHP ownership is much easier then Apartment Building ownership, but just think how much easier it would be if all your lots were filled with resident owned home. Piece of cake.
The issue about getting the renters to become owners is because the renters are living in the homes now. I am not going to kick them out (some have been there for years) just to see if I can replace them with a buyer. If I have a vacancy in one of my newer homes, yes, that seems to be the way to go.
The CASH loan program results in a 10 to 15 year mortgage. During that time there is lien on the home so it can’t be moved. So that is not a problem.
If you are operating a business to make money and your renters do not want to buy why would you not get rid of them. Why would you care about someone that could care less about you unless you see the operation as a social housing program.
Sorry but it always confuses me when someone in business does not place the bottom line first and foremost.
The general idea of owning parks was not to be in the rental business of homes or why not own apartments. We are looking at a large park with 15 rental homes and built in our buying price is to give the homes away or at least ask a very low price to rid our selves of the headaches and as Greg says if they cannot afford to own them they can live somewhere else. Some parks are operating mini section 8 housing and of course the park owners would never consider living in those surroundings but yet brags about the money and the number of parks they own. Any park we own we would be very comfortable living in them plus our first home we owned was in a mobile home park. Wonder how many present park owner ever lived in a mobile home park and really under stand their paying tenant concerns.
My question is the same. I have $600K+ tied up into homes that I have brought into my community, fixed up and have sold via seller-financing over the years, where every home in the community is owner-occupied with total payments on average of $550.00 per month (inclusive of home, lot rent, insurance and taxes). I’d like to get 21st Mortgage or a competitor (if they have one) to refinance (so that I’m in compliance with Frank-Dodd, SAFE, etc.) each individual note with my buyer so that I can get my cash out and pay down my big note. From there, I’d like to use 21st Mortgage’s CASH program to fill up my remaining 45 vacant lots with new homes, generating lot rent only from all of my lots. I recognize that I’d may have to back-up the individual buyer in such case they default with 21st Mortgage, but that’s basically what I’m doing now anyways. Has anyone done this? If so, please post here or call me at 252-347-9606. Thanks.
At some point it would just make sense to go ahead and call up 21st Mortgage and ask them these questions. They will likely be far more helpful than any of us can. I asked the question on the show about financing existing homes in the community to tenants. The answer they gave was yes and they gave some generalized guidelines about how they would set the top dollar price you can charge for the home. Something to the tune of 120% of NADA + plus the cost of home setup. They want to see a minimum transaction of $10,000 per home they finance. Don’t quote me on that, but that is how I remember it.