Posted by Ernest Tew on June 10, 2000 at 06:44:18:
I’m not sure about what you would like to accomplish. In one instance, you mention doing “Lonnie” deals and in another you say that you would like to sell the homes and “just landlord the dirt.” I assume you mean that you would like to sell the older rentals and leave them in place.
First of all, you may be in a good position to negotiate a lower price and/or better terms: the homes are very old (and probably very small)and the cost of moving them and setting them up again would probably exceed their value.
Be sure to determine the size of the lots in the park and if they will accommodate today’s larger mobile homes. If not, you have another strong negotiating point–and a serious handicap. With today’s easy financing for homeowners who typically look only at “how much down and how much per month,” they want to buy large, new homes. Small, older, homes are more difficult to sell. If your intentions are to upgrade the park, it will be difficult if the lots are not large enough to take at least a 14 x 70 foot home.
On the other hand, you could keep renting the older homes and view them as a temporary income stream. That, however, will require more management and maintenance on your part.
When buying parks, there are a lot of pitfalls–and a lot of opportunities to make money, especially when you use a few creative strategies. If you are not experienced in this area, you may want to contact Creative Real Estate about picking up a copy of my manual, “How To Get Rich Helping Others.” It discusses the lessons we learned in acquiring parks over the past seventeen years and how we made money turning them around–and how most of the profits can be tax-free. It also includes a computer disk with some excellent forms that will serve as a checklist and help you avoid costly mistakes.