How to best fill vacant spaces in our mobile home park

How to best fill vacant spaces in our mobile home park? It is advisable to buy new MHs and then sell them? Will any manufacturer floor plan such an undertaking.

There are several ways to fill lots. You can buy old, repo or new homes. You can rent them or sell them. There are no manufacturers that will floorplan a community, but Legacy will finance the homes – you should talk to them about their program.

Before you start selling them, make sure you understand 1) the SAFE Act and 2) dealership license requirements. You can escape both by renting.

You should also look at 21st Mortgage’s “CASH” program. They work with/through Clayton Homes. They will floorplan a few homes at a time (if I understand correctly what floorplanning is). The catch is that you have to give up some of your lot rent for 5 years (goes to pay down the purchaser’s note – makes the home more affordable). You also have to guarantee the purchaser (you buy the home if the purchaser defaults) and if the home does not sell within a year, you have to buy it yourself at that point.

Much easier & less expensive to buy a used one.

I’m still hesitant to buy new. In Ohio I’m looking at $15,000 - $20,000 for a mid 90s 16 x80 vinyl shinlge ready for movein and it looks like brand new that home is going to be low 30s? That is almost a $15k difference. For those of you buying new - what pushed you over the edge to do so?


The big advantages of new are 1) Legacy’s park finance program (where they carry on a 10-year note 2/3 of the cost of the home and set-up) 2) you don’t have to renovate them (and finding and managing reno crews is one of our hardest chores) 3) you can sell them day one (when you reno, we often loose a huge amount of time waiting to get it ready to sell) 4) they’re new, so customers, appraisers and lenders seem to like them better. But we also buy a lot of used homes exactly as you describe – and for the same reasons – so we don’t buy exclusively new. But with the price of repo homes rising, the price spread of the new homes is coming down and making us buy more. If you can still find plentiful homes like you describe, then I’d keep buying them. In many markets, however, they seem to have gone the way of the buffalo.

In our communities we are set up with every possible way that I know of to infill vacant sites.

#1 A 5% API credit line that we can use to buy new homes directly from the factory or buy used homes from where ever

#2 The same credit line can be used for a down payment with the Cash program that 21st Mortgage offers or others - with every $100K of the credit line we can purchase $400K in homes. That is 100% financing on the homes and this may not work for everyone.

#3 21st Mortgage Community owner program. In this program 21st Mortgage brings in the home 100% on their nickel and we are responsible for selling the home within one year. 21st Mortgage will finance the buyers at varying interest rates depending on the buyer qualifications.

I like their effort, but can’t find any advantage in the program for our business.

The downside to this program in my opinion is that we as the community owner guarantee these loans if the seller defaults. We make the payments at the same interest rate the buyer was given at loan origination (average= 10.99%). We also have to subsidize the principle reduction on the buyer’s loan via contributing a large portion of our lot rent to the buyer over the first 5 years of the loan. 21st Mortgage wants to see a 50% principle reduction on the loan within the first 5 years. We all know if you had several of these loans go bad at once it could create a bunch of problems. This program will not work for me and my particular business model.

#4 Lonnie Dealers who own homes in our communities.

Unfortunately Legacy doesn’t offer their program in Idaho. I would like to have another new home purchase option.

The best tool we have is the credit line and leverage.

The ultimate tool is when your cash flow is large enough from the existing home loan and rental home portfolio to allow you to buy homes internally for cash free and clear. This option really gets the infill program moving forward rapidly.

Rick Ewens

Unfortunately Legacy does not go to Ohio either. Right now we have adequate supply of funding from financial friends at around 8-10%, so for me I guess it boils down to how long can I put up with the hassle of managing the 3 ring circus that is the finding, moving, rehabbing of used homes. And Frank you are correct - sometimes I forget to factor in the lost income from the 3- 6 months of rehab time. I just keep having these awful visions of buying a brand new home and then having it trashed 6 -12 months later. Do you change your criteria for the new home applicants (ie no pets, or some other filter - without violating fair housing?).

And finally, assuming you are not buying Legacy - what other other homes seem to offer the best bang for the buck?


In my shopping prices from different manufacturers I found they all have very similar makes and models to sell at very similar prices.

I have shopped Legacy, Fleetwood, Schulte, Marlette and others and found the biggest difference in bottom line price was the transportation to get it to my communities. They all seem to have a very inexpensive -cheap home, but I wouldnt buy them mainly because I would like the home to last longer than the term on my property loan. The low end models are still trailers in my opinion. For a couple of extra thousand you can get a home with market appeal and longer lasting quality. We by Fleetwood North River Models 24X44 and Waverly Crest 28X44. You will probably find them named different in your region. I can get quantity discounts if I want to buy multiple homes at a time.

We buy nicer homes also to make the overall community look better and in real hope that the value will be higher if we decided to sell.

I know the last banks and appraisers I delt with liked doublewides. They also sell much better in our market area

So then what about home values when it is time to sell the park? Let’s say you have invested $30k per home and now 2- 5 years later you are selling the park. What can you expect to recoup for those “almost new” homes? Or do you figure if you buy new homes you are sort of locked into a long term hold strategy?

We have conduit financing with a 10 year term. We are also long term hold investors wth these particular communities.

Great question though and one that has to be considered very seriously by MHP owners who are infilling with hopes of selling short term and not wanting to owner finance. I have a community in NC that faces this problem. We have more money in the homes than we do in the dirt and over 50% POHs. Everyone knows banks dont like to see that many park owned homes. My lender wanted less than 10% park owned homes in the last deal we did. With a long term investment POHs dont bother me at all, especially considering we now have the safe act to deal with anyway.

Rick Ewens

First of all, let me say I agree with almost all of what was said above, particularly Frank with the problems of rehab – we have a bunch of rehabs going on right now and we can sell or rent our homes as fast as we can get them ready – but we can’t get the crews to get them ready fast enough (we’re in oil country and able-bodied workers want to work for oil companies that we can’t compete on pay with). And repos are rare around here these days.

We’re reluctant to infill with dozens of new homes but a few at a time seems to be the right idea. I look at the $30k problem this way – every additional filled lot nets you something on the sale, maybe $20k per lot. And you got some money in the form of house rent or home payments in the meantime. So even if you get nothing additional for the home from the park purchser, you hopefully will at least recoup the costs (and hopefully make a profit!). And for a new(ish) home, maybe you can get a little something from the purchaser too – not $30k but maybe $5-10K. After all, if the purchaser of the park doesn’t want it, you can probably sell it privately for that.


“What pushed you to buy new?”

That is an excellent question – in our case, we have a park with smaller lots in one section and high demand for 2BR homes. All the repos we see are 3BR and it takes a long time to get them rehabbed anyway (see my other post). So we decided to test the market for a new (smaller) 2BR. It was a “CASH” home from Clayton/21st Mortgage so we were out nothing (except some hassle) and now we have a nice new “show” home at the front of one of our sections visible from the street. It didn’t take too long to sell.

I should add that we brought in two new 3BR’s a couple of years ago (paid in cash) and they were very difficult to sell – that was NOT a good idea. When did not sell we had to rent them for a while. We finally sold them as used (at a significant discount to what we paid). We didn’t lose our shirts but we learned our lesson – get an idea of market demand before committing.


I truely appreciate this invaluable advice on filling our vacant spaces. I will contact the

Legacy company to see if they sell in Texas. Our 55 plus community is in Rockport, Texas. My

goal is to update the park with newer homes. We dont want to restore older units and have no interest in renting. I

like the idea of the smaller units Brandon spoke about. Our customers will be retired people looking for a vacation or second home.

20-25k price range seems to be the best financial model, but most 3 bds are in the 35-40K. I would like to build a business

model but dont know what are the current interest rates, term length, and down payments needs for new financing.

Nobody wants units that dont sell or finance.

Last question. Would the upcoming manufactured housing show in Mississippi be worthwhile for us to attend.

I’m going to the mobile home show in Tunica, Mississippi next week – but I’m going to write about what’s there and take lots of photos and put it in the April MH newsletter, so you can see the show without going there. If you’re within driving distance and have the time to spare, there’s certainly nothing wrong with going to the show and walking the mobile homes (there will be about 40 to 60 of them there). But if it’s not a simple day trip,you could also just walk a few at your local mobile home dealership, and spend the same money on taking your significant other on a weekend trip – and it would probably pay bigger dividends.

gtogoodies. Hello, my name is Mark Ledet and am the Director of Park Sales here at Legacy Housing and yes, we do sell in Texas and in multiple other states. I do have some homes that fit your criteria and would love to talk to you more about them and our programs as well as send you some quotes. Please call me

Office: 817-632-3351

Cell: 303-501-4403

Fax: 817-624-7573


I think I get the concept most of you are talking about. Fill the empty mobile

home park spaces with rentals.

Certainly the rental market is 100 times larger, but we are wanting to fill our spaces with new home

owners, not renters. We thought the 55plus community would want the advantages of manufactured

housing in a land lease park.

Perhaps our business model is flawed. There may be too few customers

wanting to buy a 30K mobile home with 20-30% down and 8-12% interest. If

they have 7-10K for down payment, they are probally going to buy stick built.

Looks like we have a real challenge.

gtogoodies Wrote:

I think I get the concept most of you are talking

about. Fill the empty mobile

home park spaces with rentals.

Certainly the rental market is 100 times larger,

but we are wanting to fill our spaces with new


owners, not renters. We thought the 55plus

community would want the advantages of


housing in a land lease park.

Perhaps our business model is flawed. There may be

too few customers

wanting to buy a 30K mobile home with 20-30% down

and 8-12% interest. If

they have 7-10K for down payment, they are

probally going to buy stick built.

Looks like we have a real challenge.

Ironic, isn’t it? That scenario is exactly why I closed my dealership in 2000…all my best leads were getting sucked into the sub prime mortgage boom. They were coming to me and telling me that it didn’t make sense to put so much money down and pay such high interest when they could buy a house with nothing down

now THAT market has crashed, but we still can’t compete with foreclosed homes on the market at 50 cents on the dollar and ridiculously low interest rates

don’t know what it’s going to take to get this industry into recovery, but I’m finding that my sweet spot is a clean used home in the 10-15 thousand range.

I’m sorry you had problems with the high downpayments and high interest on MH. It’s

hard to understand the market, because new cars sell for twice MH and the interest rates are half

as much. Automobiles have a million times more bad loans. I think its that todays MH lenders

have little competition, not more risk. They simply want to make more money.

I can buy a new GMC Yukon for 60K with 3-6% 7 year financing. A 30K

mobile home is 8-12% on 7 years.

I can only think of one answer. It is that we have to become better salemen.

There are some benefits to living in manufacturered housing. There are some disadvantages.

Helping customers understand the advantages is best illustrated with a new mobile home, already set up in a park.

Complete with flowers, porch, and blue birds in the trees. Rainbow arching over a clear sky, and gentle breezes blowing.

We can show them what it’s like to be home. This can’t be duplication on a sales lot, or on the Internet.

When car dealers create allow a test drive. They know nobody learns much from driving a car ten miles.

But it creates clarity and desire in their customers. It takes the edge off the interest rate and payment struggles.

It takes nerves of steel to step-up and fill your park with new houses. But, if we believe there is an

future industry here. We have to put our money where our mouth is. After all, we’re asking our customers

to do the same thing.

As I see it, there is a huge difference between mobile homes and automobiles which makes this analogy inapt.

I’m not in the car business, but I believe that if the car owner doesn’t pay, the car is reposessed, often by “self help” and usually recovered in relatively good condition. By the same token, if the car is damaged or destroyed, it is generally covered by insurance.

A home, at least a home that was affordable to the lowest income brackets in the first place, is likely to be significantly discounted upon resale and/or require relatively significant rehab expense to resell, unlike a car. Damage to the home is usually significant and created intentionally by the owner (or through carelessness, or from other reasons not covered by insurance). There is no “self-help” available to lenders with respect to eviction, and during the process of eviction there will often be retaliatory damage to the chattel. The home lender is likely to repo a product that is not worth nearly the amount of the note. The interest rates on home chattel notes reflect that risk.