Starting a new thread on this topic to get some updated opinions on current best practices. When purchasing a park which has fairly high vacancy and will require the infill of 10+ homes, how do you keep the accounting and the contracts clean between the Park LLC and the Homes LLC?
Do you really have the tenants sign two separate leases (lot rent lease with Park LLC, home rent lease with Homes LLC)? Do you have the write two separate checks, or do you have one entity collect and then make a transfer to the other. Do your lenders require any income/expense which is home acquisition and upkeep related to be accounted for solely within the Homes LLC? I’m told that most local portfolio bank lenders are okay to collateralize the park-owned homes, but CMBS and agency lenders will not allow this.
Assuming you have the same partners/members of the Park LLC and Homes LLC, how to you compensate the Homes LLC for a home sale transaction? Many Operating Agreements require contractor arrangements which are arms length, so I could see where this could potentially get sticky.
We’re in the process of structuring this operation for a new park in Arizona, and I’d like to keep it as simplified and streamlined as possible (ie. not overthink the entity structuring). Any input from park owners who’ve done this recently would be much appreciated!