I’ve been looking at a park with 55 POH’s, with 90% occupancy. The park is priced right, based on lot rent only. If I ended up buying the park, what would be the problem with selling the POH’s to the tenants for crazy cheap prices? Lets say $200-$1000 per home, just to get them off my hands? Would this be a completly ridiculous move?
This is a very good question I am also interested in as I am relatively new to the industry. If this is question has been answered before can someone please direct me to the proper discussion. I know there are various laws that may need to be taken into consideration when selling/gifting POH’s such as needing a BD license, gift tax issues (if giving them away), fair housing act, etc. Some addition insight from a veteran would be appreciated.
I would rather not go into any rent/credit details or conversation as these have been addressed in other posts. If I own the title to the homes is there anything prohibiting me from selling them far below FMV in consideration to the possible issues asstated above? Please keep answers directed at the stated question rather than wasting time talking about issues such as vetting tenants and other information that can be found in other posts.
Do some searches for rent credit program, and better yet buy a copy of the MHU Home Study Course. It talks about this in detail and has the forms and everything to get started. As part of your searches here you should find a few strategies on how people have decided to sell these off.
This is a cash based program so does not have Dodd Frank, Safe Act, FinCEN, etc implications. Depending on the number of homes you have to sell you might need to get your dealer’s license - I would have to go back and look.
There are no restrictions on pricing and if you chose can give them away for free.
Just remember you reap what you sow.
I wouldn’t, but some questions. Age and condition of homes? Quality of park and residents?
If you did, you’d want to wait awhile to figure out which tenants you want to keep and which ones to boot.
If you give the homes away, people won’t appreciate them, they’d view them as they would a $200 car, disposable.
@Jay7 , as per your post:
- “If I own the title to the homes, is there anything prohibiting me from selling them far below FMV…?”
I agree wholeheartedly with @Coach62:
- “If you did, you’d want to wait to figure out which tenants you want to keep and which ones to boot.”
- “If you give the homes away, people won’t appreciate them…”
I would suggest waiting at least 6 months to see if you really want to keep your current tenants.
You will probably have some good tenants and some not so good tenants.
Contact your local police force on a regular basis to get a “Crime Report” of your MHP.
The “Crime Report” will help you with your tenant evaluation.
We wish you the very best!
Kristin makes some good points. Personally, if they can’t come up with at least $1,500 down, I don’t want them. I want to know they have skin in both the home and the park, plus I want them to be motivated to keep the home, their yard and the entire park up.