Several people have asked me about buying new homes. I have looked at many companies and have found that Fleetwood has a great home and very well priced. Several investors that I know have bought homes from Fleetwood and very happy. Here is the contact information for Fleetwood:
If you need financing for the new homes, GE Capital is very easy to work with and will provide financing for individual homes or as a package. GE Capital works very closely with Fleetwood to make it easy for the park owner to purchase the new homes:
Are you talking about purchasing from Fleetwood directly? If so, would they sell to someone who wants to purchase one every 3-4 months or talking about a MHP owner ordering several units?
In Texas, a RBI license (state license is required to own and operate a MHP). New home dealers or banks that specialize in repossessed homes have to sell to someone that has a RBI license as they have got fined heavily in the past for not doing so.
I have never heard about being required to have an insurance license. If the homes are being financed, the lender will require an insurance policy on the home in case of a fire, etc. to cover themselves (similar to a stick built home).
I checked with another investor yesterday who has bought from Fleetwood and they said the only thing that was required was a RBI license (issued by the state to operate a MHP/buy MH’s). They were never asked for an insurance license. They did tell me that Fleetwood discontinued a really small size home that they were purchasing from them and they are now buying a similar sized home from Champion.
Another manufacturer that we have used in the Southeast is Horton. They make a medium grade 14x68 3BR, 2BA single that is reasonably priced. Fred and I have 10 or so at our park in Albany.
They were also able to help another investor on this forum who has a park in NC.
The only drawback with this company is that they only have one plant and it is located in central Georgia. If your park is more than 500-600 miles away, transportation costs may be an issue.
I would be curious to see a sample deal involving a new home that works for a park owner ( what you paid for the new home and how the park resident was financed). I went to the Louisville Manufactured Home show last year and gathered all kinds of info on manufacturers and financing. I even got my dealers license in Indiana, and there are many sources of homes close by in Indiana. With all that, I’m still hesitant to pull the trigger for a new home deal. Here are my concerns:
If you are going to get the resident approved through Greenpoint or Vanderbilt or similar, they will need a decent credit score, that is approaching 600 or better. So far none of the applicants for my park within this past year would qualify. They also need approx 10% down, which makes it even more difficult. So under this scenario, I would still be sitting on my $26 - $30K home losing sleep over the high carrying costs.
If I decide to take matters into my own hands and try to finance a buyer inhouse (which is what we do with all of our repo sales), then I have to put them on at least a 20 yr am to get an affordable monthly payment. Then my home essentially turns into a rental because we have confirmed what Lonnie preaches - shorter terms lead to higher chance of a final payoff. In the meantime, my brand new home is potentially trashed and has instantly lost market value.
When comparing to the repo approach, where I end with about $15k- $20k into a late 1999s home, and can put someone on a 84 to 96 month lease purchase, it just seems to make more sense and lower risk.
Don’t get me wrong, I would love to be able buy new and have my park look better and not hassle with shopping for used and fixing up. In fact I was ready to go for it after the show last year until my partner (also my wife) convinced me otherwise. I would be anxious to see how it is working for others.
Just curious - are you still at the park in North Carolina (or was it So Carolina?), or have you acquired another property? Good job getting to 95% - that is my goal this year on my OK properties.
