Just what are Land Lease Communities? How do they differ from a standard mobile home park? And, why should I avoid purchasing one? I seem to recall Frank mentioning at boot camp that Land Lease Communities should not be purchased. RL
A Land Lease Community is the same thing as a trailer park, a mobile home community, and a manufactured home community. It is just a name. The community you are thinking of that Frank mentioned, which I am not sure what the name is, is one where the home owner owns the land and the home. That is what you want to stay away from.I am not sure exactly how that business model is run with that type of community so maybe someone else will chime in with more details.
Thanks for the information!
The community that I am aware is where the homes are not in a specific park, but located on streets with the appearance of a subdivision. I looked at one for sale just last week, however it was hard to see a path forward due to they’ll ills owners in the community. There was a burnt trailer and may other empties just sitting. Although selling at a 14’cap, it ain’t with it. In the end, no e it strategy.
The concept to stay clear of is “lifestyle choice” in which the competitive advantage of the mobile home is negated by being too close to the cost of a conventional house or condo. This is what has kept UMH from ever going anywhere (here’s the article on the issue from the Wall Street Journal in 2012) http://online.wsj.com/news/articles/SB10001424127887323717004578159522855501566?mg=reno64-wsj&url=http%3A%2F%2Fonline.wsj.com%2Farticle%2FSB10001424127887323717004578159522855501566.htmlDave and I believe that any customer, if given the option to buy a stick-built home or a mobile home, will always choose the stick-built. So you HAVE to have a price advantage to make mobile homes work. The only one who can make mobile homes sell like SF is ELS, and that’s because they buy mostly parks in CA and FL that appeal to wealthy seniors. As a result, they sell 90% of their mobile homes for cash.
Frank. What about parks where they do own the land and the home? I haven’t seen any but I’m sure they are out there. How are those run from an owner stand point or is it more like a compound where the individual residents run things themselves?