I have two homes in my park that are for sale that I would like to buy and keep in the park. I plan to RTO or Rent Credit these homes so I can keep my lot income in tact. I would appreciate some feedback from you other park owners as to what you think the homes are worth. Currently, the lot rent is $150. All utilities are public and invoiced directly to residents. Mobile homes of this size rent for $800/month here as a straight up rental.1st home is a 2008, 16’x80’ Clayton MH. Great condition. Vanderbilt repoed the home when resident fell behind on mortgage. Will be purchasing from VHM.2nd home is a 1996, 16’x82’ Southern Lifestyles. Great condition. Buying from homeowner. Terminal illness is forcing them to move in with a family member.All rough guestimates, feedback and suggestions are welcome.
Your lot rent is way too low. Lot rent is generally around 1/3 of the total ‘home + land’ package. So if the home is worth $800/month, your lot rent should be closer to $275/month.As a general rule, you never want to spend more than 100x your monthly lot rent on a home. That 100x rule is for a home in some other park, or on someone’s land, that you’ll have to transport in to your park, skirt, rehab, etc. There will be at least $5,000 of other expense with a home not in your park. So for a home already set up in your park, your budget should probably be closer to 60x or 70x your monthly lot rent. Of course, with your lot rents so low, that shifts value to the homeowner. They may have several viable interested parties wanting to buy the home because of your low lot rent (and to keep it there). But that’s not the worst thing in the world - to not have to buy the house and keep collecting lot rent.It never hurts to ask open-ended questions like 'what do you think your home is worth?'Ultimately your home is worth what you can sell it for in your park with a reasonable downpayment (probably $2,000). So run some test ads and figure out what your market will bear. That is your maximum price.Good luck,-Jefferson-
Jefferson,You are correct about the lot rent being too low. I just recently purchased this park and I’m in the process of turning it around. The rate of $150 per month was being charged by the previous park owner. Lot rent comps here range from $185 to $225. I’ll be going up to $210 per month this year.That being the case, according to your formula, my budget should be around $12,600 to no more than $15,000. Thank you for providing this rule of thumb. I really appreciate it!A down payment of $2,000 is defintely in line here.The first home is being sold by Vanderbilt. I’ve already spoken to the case manager for the repossession. He informed me that they would list it for around $27,000, but would probably sell it to me for around $22,000 since they would not need to move it from the park and set it up in their lot. Do you think I could make this figure work with a lot rent of $210? In your experience, would they sell it for even less than $22,000?
I’d offer 20k at most to start, probably more like 19
PMarone, we purchased the following Foreclosed Mobile Home from 21st Mortgage for $5,000 (21st Mortgage wanted $6,000 but we countered with $5,000…we are in South Carolina):- 1999 Redman Riverview - 14 x 56 - 2 Bedroom - 1 BathroomIn addition we had to pay the following:- $1,000: Back Lot Rent- $241.68: Back Taxes- $2,100: Move ItThe Mobile Home needed:- New Subfloors: Bathroom, Hall & Some Of Bedroom- New Paint: Had Been A Smoker- New Vinyl Flooring- New HVACWe also just purchased the following from an Individual for $15,000:- 2000 Oakwood - 14 x 76 - 3 Bedroom - 2 Bathroom In addition we will pay the following:- $2,400: Move ItIn your situation I would concur with Coach62 and offer Vanderbilt $19,000 (and be willing to go to $20,000) for the following:- 2008 Clayton - 16 x 80Find out if you will have to pay any Back Rent and/or Back Taxes.We wish you the very best!
Questions to ask yourself, in general:How much would you pay to replace it? And how much would you pay to rehab it? I think Vanderbilt is about right, for a late-model 80’ home. I’d probably pay but it’s not cheap. Only if I could turn around and re-rent or re-sell it immediately at a price that gives an adequate return ($800 is probably about right).Brandon@Sandell