MH Park Rehab - Posted by Lance

import · December 28, 2000, 3:01pm

Posted by phil on December 29, 2000 at 24:52:43:

Where are you located? If you are in Texas, I believe can help you. If not I am sure some of the other people here will have ideas. How about letting other investors know that you would like to get some good quality used homes in the park. Also, are you doing anything to upgrade the park. Is it full of drug pushers, etc.? I do not mean to imply that your park is like that, but judging from what you say about it being that run down, it has been my experience that what you get in run down parks is the people who are not allowed anywhere else. If you are not diligently watching your park this could be the kind of people there. If you have bad tenants in the park, you are not going to attract good quality ones.

I wish you the best of luck,
Phil

import · December 28, 2000, 3:01pm

MH Park Rehab - Posted by Lance

Posted by Lance on December 28, 2000 at 16:01:42:

I have a MHP with 87 lots. There are 40 MH’s occupied, all in the late 70’s. There are 20 MH’s empty and each needing to be rehabbed for at least $6,000 apiece. The MHP is run down, rents are $200/mos, lot is $150/mos. We have tried to sell the MH’s and carryback financing, but those that have purchased eventually give up and abandon. The cost of fixing is too high for the novice owner. When we get the homes back they are usually worse off. It costs about $800/unit to tow it to the dump or dismantle it.

How can I restock my inventory with affordable homes? The market won’t allow me to buy new, and the used MH’s are still in the $15,000 range. Financing used homes in nonexistent. We have attempted to clear 3 or 4 lots in a row and try to attract owners to bring in their own homes. The MHP is too run down. Trying to fix this up has depleted my financing in order to continue without increasing occupancy. Any ideas?

import · December 30, 2000, 8:42pm

Re: MH Park Rehab - Posted by ray@lcorn

Posted by ray@lcorn on December 30, 2000 at 21:42:31:

Lance,

You may not believe this, but your situation is one that I search for in my own market. I’d like to help you to analyze your options, but I need more information.

First, you didn’t mention the amount of existing debt owned on the property. The amount, terms of repayment, rate, type of lender (i.e. bank, an individual or a finance company) etc. will be necessary to evaluate the total project.

Next is the existing cash flow. Obviously there is some revenue being generated. I need an idea of the gross income and the expenses. Please try to be accurate as possible in both. I am especially interested in utility costs.

Next is market information. What is your market like? What do competing parks charge for lot rent and what services and amenities are included? What is the average occupancy of the competing parks? What is the deamnd for spaces? How do new home dealers place homes when they sell them?

Finally I need to know a little about your personal situation. How much cash do you have to work with? How is your credit? How much other debt do you have? Is the park your only source of income?

With the above information we can begin to get a picture of how we can structure a turnaround of your park. This may sound far-fetched, but I’ve seen worse situations turn into high quality investments with nothing more than a change in thinking. Sometimes an outsider can see things that you are just too close to the situation to see.

We (Lonnie, Terry and I) had a man come to the “Making Money with Mobile Homes” seminar in 1999 with a 275 space park, and 225 vacancies. He was out of money, out of credit, and was in an area that had just seen the worst flooding in 100 years. We spent a few hours talking about the same type of information I just asked you for, and were able to put together a game plan that he then went back home and put into motion. The last time I talked to him, he had a manufacturer putting new homes in with an in-park sales operation, and he was well on his way to creating a great investment. The same type of turnaround can happen for you.

Look forward to hearing from you.

ray

import · December 29, 2000, 4:01pm

Re: MH Park Rehab - Posted by Ernest Tew

Posted by Ernest Tew on December 29, 2000 at 17:01:01:

I assume you mean that the home rents for $200 plus lot rent of $150? If you are getting only $200 including lot rent, the home must be in very bad condition. With homes that are more than thirty years old, you may want to consider whether they are worth fixing up.

To get them out of the park, try advertising and offer to give them to anyone who will haul them away. Some people will put them on their property and use them for storage. And some will use them on rural land as hunting or fishing cabins. A few may try to fix them up.

If the homes are worth fixing up, try getting a fix-up person to provide the labor with you providing the homes and the materials and splitting the profits (in whatever percentage you can agree to).

You might look into taking in a partner as a financal backer–preferably one with experience–in order to get money for upgrading the park.

Or, you might find an entrepreneur that would lease the entire park with an option to buy. Several people who follow this forum are interested in getting into their own park. At the right price, they could make a nice profit by turning the park around. And you could receive a safe return on your investment while being relieved of all management responsibilities.

If you would like to discuss any of these ideas further, please give me a call at (352) 475-1280.

Good luck