Park-owned homes

Virgin here…trying to find a park to buy. I found a park, (about 100 pads), that looks interesting. Owner willing to carry loan. The problem: All park-owned homes. Although I might tolerate 15-20% POH, I don’t want all POH’s. The owner is willing to retain the homes until he can sell them (Notes), and guarantee the lot rent… With him carrying the loan, that part seems fine. Of course, in such an arrangement, there would need to be an agreement (also inherited by the buyer of the home) to leave the home in the park for a specific number of years. But what happens when I have a “problem” tenant?

I can forsee possible difficulties in such a stiuation. If there’s any problem with the tenant (Monster dogs, nuisance, etc), I don’t see how I can remove a tenant who is responsible to someone else for the payments. Obviously, I don’t want the home removed…only the problem tenant.

Also, I can see a strong possibility that such an arrangement, complicated by problem tenants, might lead to a conflict with the seller (who now holds the notes on the homes).

Those buying homes with low (or nothing) down, are no more controlable than renters, uintil they have built up some equity. (vested interest).

Any suggestions as to how to overcome this challange? Frank ? Jefferson ? anyone ???

As park owner you have the right (which I strongly suggest you exercise) to enforce park rules on anyone. It does not matter who owns the home, or how it is financed. If you have a bad apple, evict that person no matter what.

Bad apples in your park will drive out good apples and open you to liability.

If a bad apple owns their home, they will now have to move the home out (highly unlikely), or sell it to someone else, or most likely, abandon it. In that case, you file the ‘abandoned property’ paperwork with the county, and in 30 - 60 days the home will legally be yours. Then you try again with a new tenant.

If you are evicting the former park owner’s tenant, then that’s just the way the chips fall. You must not give special treatment to allow any bad apples in the homes - it’s your land.

Be sure your park rules and regulations are approved by an attorney in your state, and that all residents are informed in writing of the rules. Then evict bad apples fairly and equally (probably after at least one warning in writing).

Your bigger issue is to insure that the 100 homes are not pulled out by the former park owner. It would be hugely expensive and unlikely for the homes to be removed, but I have seen it happen. It happens when the homeowner/investor owns another park, and pulls the homes en masse into that other park to fill it up. Have an agreement in writing with the current park owner that the homes stay in your park, provided you charge some ‘reasonable’ rent.

Let us know how it goes,