For those of you that have investor owned homes in your parks, do you use the same lot lease for them that you use for your regular tenants? If so, do you tweak it all due to the fact that they are subleasing the lot?
No, we use the regular lease.
We make no ‘tweaks.’ We do however make 'duplications.'We have both our Lonnie Dealers and their subtenants sign our lot lease. That way we can go after two people if the lot rent is unpaid (generally the Lonnie Dealer would have the deeper pockets, and effectively becomes a co-signor to the subtenant’s lease). Plus with a lease signed by the subtenant it is easier to evict (better documentation always helps). Always do a background check on the subtenants.Best,-jl-
For someone who did not have enough capital to buy Mobile homes to fill his lots wouldn’t it make sense to offer a Lonnie dealer a deal (or even free) lot rent to entice them to bring a home into your park? Both park owner and Lonnie dealer stand to gain from renting the unit out so I don’t feel like they would just let it sit there.One idea that has been rattling around in my brain: 1) Buy an under performing park with good expansion potential in an area that has enough demand to warrant the justification for expansion.2) Offer Lonnie dealers free lot rent to move in and set up Mobile Homes in accordance with park standards.3) Work with Lonnie dealer to find tenants acceptable to both parties.4) If tenant defaults on the loan the park owner may take up the mortgage at his option.Doesn’t this seem like Win/Win?I assume I’m missing something.
PMarone, we are going through the whole Lonnie Dealer situation.Please learn from our mistakes.Seven months ago we purchased a ‘Turn Around’ Mobile Home Park. There were approximately 12 Condemned/Abandoned Mobile Homes which we removed from the Park.There were also 2 Vacant Park Owned Mobile Homes.We felt very strongly that either we or another party needed to either fix up these 2 Vacant Mobile Homes or they needed to be moved off the property. Otherwise, if they sat Vacant in the Park, they would become targets of vandals.We then met a Lonnie Dealer who promised the world. He said that he would fix the Mobile Homes, put wonderful Tenants in them, keep the Tenants in line and pay the Lot & Water Bills.Thus, because we ‘believed’ that this would be a win/win for all involved, we gave (for free) the 2 Vacant Park Owned Mobile Homes to the Lonnie Dealer.We did this for numerous reasons:1. Removes our Liability off the Mobile Homes2. Removes our Time, Effort & Money to fix up the Mobile Homes3. Places paying Lot Tenants in a Formally Vacant Mobile Home (which was not collecting any money)The Lonnie Dealer did proceed to renovate the Mobile Homes (which was a good thing).Unfortunately, every other aspect of this particular Lonnie Dealer is negative.Here are some of the issues:1. Mobile Home Title: Lonnie Dealer selected not to transfer the Mobile Home Title. We never even guessed this would be an issue. If a person buys a vehicle, they go to the DMV and get the Title in their names. However, this Lonnie Dealer was dead set not to transfer the Titles into his name. I (on the other hand) was dead set that he was going to transfer the Titles into his name. Part of the reason for giving him the Mobile Homes was so that the Liability would be out of our names. After many frustrating rounds of correspondence the Mobile Home Titles are now in his name.2. Tenants: The Lonnie Dealer said that he would provide ‘wonderful’ Tenants. Unfortunately, the first Tenant decided to urinate outside on the lot in front of other Tenants. Then he allowed his guest to urinate outside (yes, they had a working bathrooom inside the mobile home). The final straw was when he was arrested for Criminal Domestic Violence and Resisting Arrest. This Tenant is now gone. We found that the Lonnie Dealer’s goal is just to find a living person who will pay him Mobile Home money. He does not care about ‘our’ Mobile Home Park. He only cares about ‘his’ money.3. Lease: After some great advice from Jefferson (about getting Leases signed by both the Lonnie Dealer and Tenant…Thanks Jefferson) we sent the Lonnie Dealer a Lease, which he has chosen not to sign.4. Lonnie Dealer Not Paying Lot Rent & Water: After the Lonnie Dealer telling us that he would be paying the Lot Rent & Water, we are now getting nothing from him nor his Tenants. The Lonnie Dealer is telling us to go after ‘his’ Tenant. If I wanted to go after the Tenant, we would have kept the Mobile Homes.We are now working on a solution to remove this Lonnie Dealer and his Mobile Homes from our Mobile Home Park.In our particular Mobile Home Park the Lonnie Dealer is not our friend and it is not a win/win situation.We would be much better off renovating the Park Owned Mobile Homes and renting them out ourselves. This is the approach we will be taking.However, I am sure that somewhere/someplace there are some ‘Good’ Lonnie Dealers. If you have one of those ‘Good’ Lonnie Dealers, I would recommend tweaking the Lease Agreements (tweaking…as per your suggestion):1. Lease Agreement - For Lonnie Dealer: The Lease states that the Lonnie Dealer is responsible to pay the Lot Rent (& Water Rent…if you have it) every month to you. If the Rent is not paid, the Lonnie Dealer will have to move their Mobile Home from your Park.2. Lease Agreement - For Tenant: The Lease states that they are responsible to pay the Lonnie Dealer every month and that it is their responsibility to contact you to make sure that it is paid. If the Rent is not paid, you will Evict them. We wish you the very best!
For newbies “turn around” parks are quagmires at times that are best left to experienced operators. If we price our time correctly the bargain park could be a costly experience compared to a “higher price” fully functional property that has a good reputation in the community that banks like to loan on the property plus they probably have a waiting list and thus needs a new owner to raise the rents considerably. Visited a local park just tonight that is for sale and wow what a mess and my rents are the same–I miss the mark still after many years of experience. Had a bank president visit our park and say they are are loaning at 4.25 for new buyers if qualified. A very good time to buy quality parks.
If we have a lonnie dealer, or a sub lease situation we require both parties sign the space lease agreement. Carl is spot on in his statement. It takes a special skill set to turn a park around, on the owner side and manager side. I know Carl is an on site guy, so he might have an easier go of it, but if your off site like me you really need to have your ducks in a row. Turn around parks have a lot of pop- but they are money hungry, time consuming and are always tossing you a curve ball.
I rent a few lots and always pay the owner of those lots the lot rent myself regardless of the situation at the rental. I never rely on a renter to pay the lot rent as I would not want a lean put on my trailer or have a chance at making the owner of the lot mad and want me to move my trailer off of the lot. That would be bad because then I would have no place to take it to with an expense of the move if I did or be forced to sell trailer and have to sell it cheap perhaps to lot owner. Neither made me sign a lease but one of them already knew who I was.In my area I have never found any empty lots in any parks that allows lonnies. The only way to get a lot that allows subleasing is to buy the trailer that is on the lot and rent it where it is or to sell it off and move your own trailer in. I have thought about buying a trailer cheap just to get the lot to rent but it is in a bad trailer park. I bought a few trailers that I have on lots that they were already sitting keeping my cost down.