Dealing with Park Policy…Need advice…long - Posted by JohnB_NJ
Posted by JohnB_NJ on February 15, 2001 at 22:59:28:
I need some advice from some seasoned MH investors. I have not purchased a MH in my investment career. There are not many parks in my area but the one park that is nearby is very hard to deal with. Here is the situation…
I get a call to purchase a 14x70 2bed, 2 bath home. It is not in great condition but not bad. It needs some rotted flooring replaced, a good cleaning and carpet. Owner wants $1000 but we settled at $750.00. This home will easily sell for 6 or 7k with owner financing. I would need to drop about 1.5k into it (that includes furnance changeover…see next paragraph)
Now here is the problem. I called the PM. She was very nice onthe phone (btw, PM doesn’t reside in the park…she lives over an hour away…). I inform her of my contract to purchase the home and I wanted to know if the lot rent was current. It was current but she informs me that in order to purchase the home, the owner must first convert the furnance from fuel oil to natural gas. She says that has been “court order”. So I asked her what I could do in this situation since the sellers do not have the cash to convert and I was not going to convert until I have title. So I asked her if I could purchase now and convert later before I move in my buyer. She says, “No, the owner of the park wants the conversion done first.” I asked her what I can do in this situation and if she would talk with the owner. She told me she would talk with the owner and get back to me. I also asked her in a hypothetical situation where someone unknowingly purchased the home without park approval. She said that is called “midnight dealing” and “we would evict the tenant and have the trailer removed fromthe property in under 30days.”
Not to mention that the Park wants ‘A’ credit buyers. WOW that is something that I find hard to believe. I have seen some of these trailers…no way these folks have ‘A’ credit. I can understand the crimal background check and I can understand credit checks…but ‘A’ credit??..
There is also a good number of empty pads in this park and rumor has it the NJDOT wants the land for a bypass road in the future. So I would have to think the the owner would like to drive off as many homes a possible so he doesn’t have to pay to move them in the future. I did ask the PM about the NJDOT rumor and she says “it is a possiblity and the the owner of the park is looking for land so that the homes can be moved to if needed in the future.”
I did ask the PM what the park would do if the owner could not afford to convert the heater (I know they can’t afford to do it) and just abondone the MH. She said they would junk it.
So, to make a long story short…how do I solve this catch 22. Or should I just say “sorry, no can do” and go back to what I do best and stick with SFH.
I would appreciate any advice. I know I can make a nice yield but i rather not have a ton of headaches. My sixth sense says…drop back 15 yards and punt…
Thank you in advance for any advice.