Manufactured homes one of the 10 “doomed” industries.
I agree. Warren Buffet biffed it on this one…we will have cheap site built homes for a dozen years here in Florida…I can’t speak for the rest of the country…but it looks grim for the industry as a whole.
Ok,so what do you do if you have 20 old mobiles rented out and each on there own land paid off. Do I start selling them and buy houses? Stick my head in the sand and do nothing? Go out and get drunk?
If they are making good money then I would keep renting them. 20 year old homes that I have still have a marketable floor plan and with some of what I call “landlord friendly repairs” they can be made both durable and attractive.
Now may be a great time to buy stick built homes, depending on where you live but I wouldn’t try and sell the land/home deals to create the cash to buy them.
Selling the land/home deals for cash would mean few buyers, fewer financed buyers and lower prices.
Owner financing would be an excellent option for these properties if you are burned out. I would suggest that you target investors who are looking for income properties and maybe sell all or several at a time. Some may be cash but owner financing will allow you to dictate the price and terms. Give the buyer good terms and you will turn these rentals into even longer term income streams (with no maintenance as the lienholder).
and be happy you made some good choices.
Did you read the article? It states that dealership revenue is off 70%+ in 10 years and will decline another 62% in the next ten years.
I believe it. Florida and Cali were way overbuilt in the good old days and there are thousands of empty condos in Miami alone. they are renting for 5-600 per month to pay dues and reduce vandalism…compete with that in a MHP? Don.t think so
Is this the end of MHPs? I doubt it…I’m still looking to buy another one or two.
But the old business model MHP is broken here and most other places. There are smart folks still buying them and keeping them full or flat stealing them so there is a buck of profit with 22% occupancy. Park is 66% full now and was 100% in 2005. LLC purchase with no recourse and no personal guarantee Saw this one with my own eyes.
I think this perfect storm we’re in is not over here in Florida or Cali.
My heart goes out to the upside down investor that can’t get out from under crushing payments or balloons but we don’t see much of that here…I went thru it and it was…tough but here the average time from foreclosure to eviction is 700+ days and there are folks living in homes with no payment for 2 years banking rent payments and buying owner financed homes in their subdivision for 35 cents on the dollar…saw this happen too.
Fact is stranger than fiction,
Greg , I think Florida , where you live is a whole different issue than most of the rest of the country. You have a hoard of older snow birds moving there that have good credit and the bucks to actually choose between a MH , a condo and a stick built home. I believe the great majority of the country has a different reason that MH producers and some parks are in trouble.
This would be the fact that the prople we rent to have horrible credit and not enough of a down payment to purchase a new home. The recession-depression we are in has hurt them the most . Where in the world are the ones that lost their jobs going to find a new one ? Now that the lending has tightened up , there is zero chance that banks will lend someone with a 550 credit score 10 grand to buy a new MH. This is the real challenge . IMO , house prices and condos could go up and you still would have the same problem in our industry. That being , how do you infill a MHP ? The only way is to buy the homes or find others to buy homes for your park. So you better be well capitalized or have a good game plan. You also need to be in an area with good demographics.
While I agree with some of the things you mention about the over buiding and sinking prices , I feel the number of people looking for cheap housing wil ony increase over the next few years. At a much faster rate that new stuff is being built. There are nice apartment buildings selling at 9-11 caps. These are strange time a as you indicate , but for years you had to be a handy man to buy apartments that would cash flow. So maybe it’s not all that bad.
Btw…I have property in Sarasota and it sucks in a majr way.