Have a dilemma and would appreciate people’s opinion on the issue: Trying to decide to: i) remove vacate homes from the park and replace them with new homes via 21st Mortgage’s Cash Program; or ii) leave the home in place and renovate them.
With the “Cash Program” there is no out of pocket cost but the park does not receive the income from the home payment either. Whereas with the park paying for renovation, the tenant will pay lot rent plus home rent plus a down payment of about $2000.
As an example, we have a home in our park that has been vacate for about 2 years (after being lived in by a couple for many years). The couple had the title to the home and kept the outside in nice condition yet when they left without notice (“in the middle of the night”) the home’s inside was trashed. Apparently they had been living in the home for months (maybe years) with several leaks (in the roof as well as plumbing).
After the couple left, the home became a park owned home (POH) and we put a new roof on it to stop the water damage. The plan was to renovate the home however it is still vacate.
The home is a 1976 50 x 24 (1200 sq-ft) double-wide with 3 bedrooms, 2 bathrooms. A local contractor will completely renovate the home for $15,000 (new vinyl windows, new furnace, remove and replace all damaged sub-flooring, new floor covering, paint, ceiling repair, lots of plumbing, etc.). This cost could be reduced by not replacing all windows, and maybe the park serving as general contractor and hiring sub-contractors.
Here are the economics:
Cash Program: No out of pocket cost. Tenant and park get new home. Park gets lot rent of $300 per month.
Renovation: Cost to renovate about $15,000. Park would receive down payment of $2000 and then monthly $400 in home rent plus the $300 lot rent.
Would appreciate input from other park owners on this issue. Which way would you go? What issues should we consider? THANKS !!