Still wanting to get in the game here as a park owner. Found a park in foreclosure. Is it best to stay away from these or try to work with all parties involved, ( owner, bank, homeowners in RTO units) to make a deal?
Dale, if you can get a ‘great’ deal on the purchase price and you get a long Due Diligence Period, I would say ‘Go for it’.However, you just want to be mindful of the following:1.) Past & Current Info On MHP: You will probably get little to no information on the MHP. 2.) Long Due Diligence Period: You will have to do a lot of investigation to find the needed information on the MHP. Thus, you will need a long Due Diligence Period.3.) Park Owned Homes: Find out who really ‘owns’ the Park Owned Homes. Some Banks select not to place the Park Owned Homes in the Mortgage. Thus, if the current Owner is foreclosed upon, they might still technically own the Park Owned Homes. If the current Owner will continue to ‘own’ these Homes, you will definitely need to take this into consideration because he might also select to ‘not pay you’ if you purchase the MHP (as he has already selected not to pay the Bank).We wish you the very best!
Kristin makes some excellent points to follow. I’ve been looking at two foreclosed parks in my area. Both are priced well and both are listed as “lot rent only.” I also know that both parks have several homes that are owned by the previous owners (but the realtors try to cover it over by saying “we have no knowledge…”). In one of the parks, the ticked-off previous owner has started moving his trailers out of the park, probably not so much because it’s an good economic move for him as it is his way of getting back at the bank indirectly (but then the bank doesn’t seem to understand, or care, that the valuation is lowered each time a home is removed!)
Kristin, makes a good point about length of the DD period. We place mortgages on MHPs for our clients and depending on the lender and the status of the parks title, getting to the settlement table can take a lot longer than you think. It pays to have a lender that understands MHPs some banks really don’t understand them at all!