Re: Conversion of MHP to Condominums - Posted by ray@lcorn
Posted by ray@lcorn on October 20, 2003 at 18:20:46:
Let me start by saying I have not personally done a condo conversion of a MHP. I have recently been exploring the concept in connection with another project. I offer my thoughts as a work in progress, and welcome comments or questions.
In my mind, the first stop to evaluate the feasibility of a condo conversion will be at the local planning department. In my own research, so far I have found few localities (including my own) have addressed a condo MHP in their land use ordinances. Most try to fit such a project into existing condo regulations. Depending on how they are constructed, it may or not be feasible within the existing regulations.
Based on what you find with the land use ordinances, you’ll want to sit down with an experienced land use attorney for a preliminary meeting to explore the process and the costs involved. There may be a need for physical improvements or changes as well, but in order to get a handle on the scope of the project the legal issues should be addressed first.
Assuming the legal hurdles can be met and physical improvements are not a bar to completing the condo map, then you have to think through the marketing and sales strategy. Nate’s point below about arranging financing has to be part of the strategy.
There are two (maybe three) potential prospect pools to buy the condo spaces.
First is the homeowner. In this case the financing issue is an important one. The home may or may not be included in the finance package, but regardless, financing should be prearranged for the buyers. Leaving each buyer to their own devices in financing the purchase will likely slow the sell out considerably.
The next prospect pool is investors. The lots can be sold with a management agreement for the park operator to continue to collect rent, or without, leaving the rent to be collected by the investor/owner. Lonnie has written in “Deals on Wheels” about the long term success he has had with owning rental spaces within a condo park. The financing may not be as important here, but I believe having a finance source available would be an advantage.
I have some other thoughts along these lines, and as I complete my own research I will post the findings here.