Re: Need to fill vacancies…is this overkill ? - Posted by JHyre in Ohio
Posted by JHyre in Ohio on November 06, 2008 at 09:31:22:
I do not think that the ideas offered below are mutually exclusive. With that said, we tend to move homes in ourselves and sell them, per Anneâ??s comment. Why? We are able to buy very cheap and sell cheap. After all costs (buy, selective rehab or prehab, move, periodic re-rehab from move-out, financing via private investors, etc.), we tend to about break even, with our target price = $500 down, $195/month for 60 months. Added to lot rent of $200, we are looking at $395 for 1000 sq. ft. 3BR in decent shape, more for V/S 16x80â??s. Bottom line, we are looking to provide excellent value on the MHâ??s to fill the lots. Having Lonnie Dealers involved doesnâ??t really meet our goals, because their markup will increase the price, lengthen the term, or otherwise delay or inhibit accumulation of equity by the residents. I want my residents to have clear and fast equity to keep them on my lot.
We use IRA money, presently at 12% (we may drop that rate in the near future as demand for private avenues of investment increases) to finance the total cost of the home and have significant cushion between the amount financed and the amount coming in. There has been an abundance of money looking for a home, and that abundance is increasing now that more traditional investments are losing popularity. In short, determination and a bit of craft on creditability & salesmanship will go a long way. Our investors are quite pleased with the rates we are giving them and the mark-up on the homes to comp them still allows us to sell cheap, cheap,cheap.
I wonâ??t say Rolfâ??s method doesnâ??t work. I will say that my method fills the park far faster than paying a move-in bonus to residents, particularly if the move-in bonus is only $1k - $2k. I view a move-in bonus as a supplemental incentive plan for acquiring residents, but not as a replacement for our move-ins. Lonnie Dealers might be able to use the move-in bonus to fill the park as fast as I can (emphasis on might), but as mentioned, their prices will be higher (because we are pretty good at buying cheap and are not looking for much mark-up over our cost) and less attractive to residents. In addition, Lonnie Dealers add a set of moving parts in terms of screening, payments, etc, whereas I provide one-stop, simple service.