I have a couple of spaces in my park that have been empty a long time. I haven’t had much luck finding a used home to bring in myself. No one in this area has the money to bring in a home; they’d rather buy one already set up. My park consists of older single wides.
I’ve been conferring with a dealer who would like to bring in new homes, set them up on these spots, and try to sell them. At first they wanted a time parameter; if it didn’t sell in 4 months would I buy it. Now the time parameter has been lifted and I have offered free rent as long as they are for sale. We’re just beginning negotiations… what should I look out for or insist be in the contract?
You just don’t want to get caught in a Catch-22 where the home does not sell and you never get paid lot rent. You don’t want your MHP to become a free storage facility for the dealer’s inventory. So I would set a 6 month time limit. At that point, the dealer needs to either begin paying rent, or pull the home out. That’ll get him thinking more clearly about price and what he may be doing wrong if the home has not sold during that time period.
Best of luck, and let us know how this goes for you,
I was thinking 6 months was a good time limit, too. He had asked me would I carry the paper if the buyers couldn’t qualify for their financing… I told him they wouldn’t qualify with me if they wouldn’t qualify with them (what’s he thinking?!)
I’m waffling about filling both lots or just bringing in the one to see how it goes. But at this point, that other lot is just sitting there empty.
I have been in the position of the dealer looking to place a home and the MHP owner negotiating with the park owner.
In my opinion, nothing is to be gained by either of you that doesn’t come at the other party’s expense and is very temporal.
If this dealer can sell in today’s market, the best thing for you to do is to pay them for selling a home into your park.
If you are not confident of their ability to get the job done- do it yourself-and do not tarry- go buy a house have it set up and then sell/lease the home.
I’m confused at why you would not want to do that deal. You risk nothing. The dealer risks everything. You get lot rent that is worth a huge mutliplier at a 10% cap rate. The dealer only gets a slight mark-up on the home.
Even if he brings in the home and leaves it there for a year, a new home in your park looks a lot better than a vacant lot.
If you don’t want to do this deal, send them over to us – we’d get it going immediately.
I’ve had dealers do this a couple of times. I’ve had individuals do it as well…someone built a home and had a nearly new home that they needed to get rid of after the house was completed. They paid to move it in and it certainly looked better than an empty lot
From my days as a dealer homes usually sell better when they are fully set up and move in ready. As the old saying goes, “no one wants to see the sausage made”…well no one wants to see the wheels on their home either, I expect, and it also gives the buyer an incentive to make a decision quickly…possession at closing.
just get everything in writing, You could be developing a valuable relationship far beyond setting one home.