I’m considering offering to paying all or part of the moving costs for an investor (Lonnie Dealer) as an incentive for bringing homes into my park.
What kind of agreement might protect me from the investor moving the home back out?
Thanks
Make him sign a multi-year lease on the home. Is that 100% protection? No. But that’s about all you can do. Since there is such a high bar to move homes ($3,000 to $5,000) it would be hard to envision a buyer pulling it out (unless it’s another park owner). I’ve never had a Lonnie deal pulled out by a buyer.
Make him sign a multi-year lease on the home. Is that 100% protection? No. But that’s about all you can do. Since there is such a high bar to move homes ($3,000 to $5,000) it would be hard to envision a buyer pulling it out (unless it’s another park owner). I’ve never had a Lonnie deal pulled out by a buyer.
Frank, how is the Lonnie dealer going to sign a lease, when he intends to sell the home on paper and have his buyer sign their own lease with the park?
As a Lonnie Dealer I have never, ever signed a lease with a park (and would not do so). Paying lot rent as a Lonnie dealer is setting yourself up for failure.
Why not make him sign a contract stating that if the home is pulled out before X number of years, he is responsible for a prorated portion of moving expenses? This would give him an incentive to structure any on the home for at least that long of a period, with a clause in the note stating it may not be moved until it’s paid off.
I think it all depends on the Lonnie dealer. We have some that we bill direct and they pay the lot rent – whether the home is vacant or not. We have others that have the tenant in the position of the payee, but will step in if it goes vacant, in between the next tenant. We have others that don’t pay rent if the home goes vacant. Some we inherited, some we brought in.
We think that the correct structure today is for the Lonnie dealer to not pay rent while first remodelling and later whenever the home goes vacant. If you go to the site www.mobilehomer.com – which we created – it will show you what we believe the correct structure to be. In many parks, the Lonnie dealer is put in an impossible position which can only lead to failure, and the big picture is that the park owner should want the Lonnie dealer to succeed so that they bring in more homes. That, in fact, is why we built the Mobilehomer site; to help promote the cause of making the Lonnie succeed so that occupancy in parks would increase.
We’ve not had any big problems with people pulling out homes after receiving an incentive to bring them in. We do make them sign multi-year leases, but your suggestion would work just as good.
JeffB,
My goal is to negotiate a fair arrangement that gives me a reasonable way to recoup my incentive (say $4000 in set-up & moving costs) and gets lots filled. I like your idea of prorating the cost. If the Lonnie dealer completed the sale of a home, it would be out of his control and wouldn’t apply.
I also was thinking of the park being able to buy homes at predetermined price so the homes don’t leave the parks, that gives everyone an exit strategy. What do you think?
Have you moved any homes into parks? What kind of agreements do you have with the park owners?
Thanks
Patrick,
I have moved homes into parks, and have had a couple different arrangements. The first one being, the park owner paid all expenses associated with moving, including new skirting and steps (if necessary). Naturally I had to deal with the inside of the home as far as repairs, which were extensive as these were cheap-o homes.
The second time I was given a dollar figure with which I could spend any way I want. In other words, get a check for $X for bringing in each home. Although I ended up with a fair amount of extra cash doing it this way after paying moving costs, I found that my inner cheapskate cut corners and the end product was not as nice. For example I used vinyl skirting instead of aluminum, and re-used steps. It’s also worth mentioning this way is considerably more work for the Lonnie dealer, which I’m generally opposed to.
As for my agreements with the park I gave them my word that I would not pull them out, and wouldn’t let the owner do so before they were paid off. No documents were signed either way, but we had already established a relationship of trust.
One other thing. You mentioned a right of first refusal if I understand you correctly. Be careful here. There is a company that owns several parks in my area and they tried this, and it’s actually a violation of the mobile home act in my state. Their language said something about a right of refusal to be able to purchase a seller’s home at the same price as any other offer, or the price they originally paid for it (if bought from the park), WHICHEVER IS LESS! So if you bought a fixer and poured a bunch of money into it, you won’t get it back out. So just make sure whatever language you do end up using is not violating any other laws.
Jeff
Signing a lease would be the preferred think to do.