As you know, I always 3rd party everything. “I work with a finance source that has a customer interested in living in your community”, etc, etc.
The finance source also guarantees the site rent to be paid by the 5th. By doing so, I always collect the site rent from the tenant/buyer. I also pick up a few extra dollars by negotiating a discount with the park manager, adding 15% to the tenants agreement, or both.
In addition, the park manager will NOT loose control of the deal, he/she just has someone else (me) to handle any problems. My contract with the tenant/buyer also states that they MUST abide by ALL PARK RULES or the agreement is terminated. I enjoy discussing this with the tenant/buyer as the 3rd party. After all, I just work for the finance company. “When you decide to break just one of the park rules, they require me to start eviction from the park the next day.”
Enjoy your posts about mobiles. Guess you’ve become the resident MH expert on the board, no doubt about it. Here’s a thought I’d like your feedback on, if you would.
As the owner of a home in a park, suppose you were to approach the PM and tell him with his permission you will be paying the lot rent personally, even after you sell the home, as long as that buyer is the owner. (Maybe you could even retain a 1% interest in the home if necessary). You
sublease the land and collect the rent as well as the loan payment from the buyer. Your rental agreement with the buyer is under the same terms as the park’s terms. So a violation of park terms would also be a violation of your terms with the buyer.
The advantages I see in this agreement are such:
The PM knows you and feels more comfortable with dealing directly with you and is more assured the rent will be paid and does not have to go through the standard credit check of the buyer.
You are assured the lot rent is paid. If it isn’t, then you can act promptly, rather than finding out you’re on the hook for several months back rent later on.
Since I don’t know enough about mobiles, I don’t know if there are real advantages to this, whether it’s even legal, allowable, or whether the disadvantages outweigh the advantages. But your feedback would be appreciated.
Hi hk,
Thanks for the kind words, don’t know how deserving I am of them though.
Anyhow I found your questions kind of neat, and along the same lines of several which I have received as of late. So as I had my Monday Park Manager Meetings today, I knew of two PM’s which I would feel comfortable in showing a copy of your post to. understand I already knew what my answer was, but I was curious to see what they’re answer would be.
Basically they agreed with what I was thinking. It is a control issue. See a lot of Parks (at least the ones in my market) do not like giving up control. If I could convince them of your proposal then, I could really bring anyone I wanted into the park. Now of course you and I know that I wouldn’t bring in the local drug dealer, hoodlum etc. But what if I did.
Now another interesting thing happens, say that my homebuyer has space issues (weeds getting out of hand etc.) Now the PM doesn’t have a contract with the tenant, they have to go through me. And of course I’m out and about doing deals and a pain to get a hold of.
Not a big deal if we’re talking weeds, but lets say that it is something more dangerous than that. Antifreeze left out etc.
Now what the PM’s didn’t bring up. Is the Lonnie Ace in the hole. As lien holder your responsible anyway for rent if it doesn’t get paid. So if I have a potential homebuyer that doesn’t qualify park criteria, I can talk to the PM and guarantee space rent. I’m doing so anyway.
As for not finding out about delequient rent till it’s too late. I have to say that really no one can blame anyone but themselves as to not following up on their business. As with any investment you will track what’s going on and where it’s at. Just part of the deal.
If you are worried though, I see no problem in the mH buyer paying you and you pay the park. In fact I would charge extra to do this. I know several people who do, I however do not, as my payments are always do on the 15th. I don’t like my home buyers getting hit all out once on the 1st. So in order for me to collect rents, I would have to do it separately, or pay the parks and have my money tied up till the 15th.
Your scenario was a good question HK but in my market I can’t see any advantages to it.
Good Luck,
Dirk Roach