Question: What would you do? — Would you sell this development project with owner financing or have the work done yourself and bring what was once a park back to life
35 minutes south of Sioux City Iowa
We already have silly stupid seller financing on this
We would add what we have already put into the development project and seller finance to the next person (if we had to)
This sounds like the ideal deal. I would go to work bringing this park up to a higher class. Put the road in with a classy entry sign and some landscaping to improve the curb appeal. You can upgrade the spaces as new tenants move in and increase from 22 to 40 spaces as demand and cash flow improves.
This will accomplish your other goal of making it more appealing to buyers down the road if it is appealing to tenants.
If you have the cash and the patients to wait 10-15 years to see a return on investment it could be a viable option for someone with deep pockets looking for the long term end game otherwise sell it as is and move on to your next project. This assumes a strong market that will attract home buyers.
Filling a empty park will see a profit upon sale and a income for the next buyer.
Why not do a wrap and seller finance to a developer under favorable terms? Probably get all your money back on the down payment and have a nice little annuity covering the original loan. Move on to the next deal. Check that this wouldn’t cause your loan to be called due, but I’d otherwise look hard into it.
Having just looked at a park in Iowa the infill could be VERY SLOW and in the process working capital will disappear.
We enjoy putting lipstick on a good MHP and spending the money to make it exceptional but if the sow is nearly dead there will be a stink—Greg is very correct!!! We enjoy it when new people come to our parks and express the feeling “this is very nice place to live”.
Our partner already has a park in the area. She owns all the homes so a different business model. But she is completely full.
There is no shortage of people wanting this park to be up and running, get financed and buy their own home. Then the city is even a bigger advocate. They asked when we got this one done, would we do a senior park in the area.
The stick built homes in the area that are available are older and priced pretty high for the square foot.
With the silly stupid financing we got when taking the park, which is a 1-time payment a year. And with the payment being so minimal,
I am struggling to give it all up and walk away from that piece of the opportunity.
However I appreciate your insight, in agreement with Greg’s, it’s a different type of Long Term project.
As Jhutson suggested…if someone else wants to develop I keep our financing, do a wrap around for favorable terms. A win-win for all.