Your Thoughts On A Changing Market - Posted by Tony-VA/NC

Posted by Chuck on October 22, 2003 at 24:53:58:

24x30 would be 720 sq feet (each side)… today’s park models run about 450 sq ft by comparison.

Your Thoughts On A Changing Market - Posted by Tony-VA/NC

Posted by Tony-VA/NC on October 20, 2003 at 21:39:03:

While it is not news to investors here that the lending practices of companies like Conseco have created a huge wave in the market for repossessed home, this post asks how the changes to lending practices is or will affect your business.

Nationally we see mobile home dealerships closing up. My local dealerships have been closing or consolidating left and right.

Those that remain appear to be clinging to a market that is no longer dictated by the demand of Buyers for affordable housing but rather a preference of what lenders will allow those buyers to purchase.

A quick look at a remaining local dealership here. The sales lot last year was roughly 50/50 new double wides vs. single wides.

Now the single wides are totally gone and the double wides have become Huge monstrosities. The modular homes are beginning to take over higher lot percentages (and space as they things are larger).

The Lending market is now dictating the set up requirements. I spoke with a local “trim out” specialist. He hadn’t skirted a home in months. The dealerships are setting more and more homes on private lots. They are using permanent foundations (blocking) in order to better qualify for the homes and clients for financing.

The interiors of the homes are changing. Vaulted ceilings, drywall, pitched and shingled roofs etc. have eliminated many of the tell tale “trailer” markings.

The lending pendulum is also off balance due to real and imagined fraud committed by investors “flipping houses.” 12 month ownership requirements for FHA loans may slow sales to first time homebuyers.

Developers and investors in land/home packages may begin to receive lower “loan to value” percentages when using bank financing.

Where does this leave us 5, 10, 20+ years for now?

I am confident that investors will continue to overcome lending obstacles, and will continue to capitalize on the “blood that’s in the water” from the repos of yester-year.

The largest question I pose here revolves around this:

Parks cannot accomodate the new, larger homes. These huge homes are no longer “affordable home ownership” alternatives in my opinion.

Will there remain a manufacturing plant that continues to supply parks with single wides?

Certainly for many years we will be able to buy repo and used homes but what about the future many years ahead?

On one hand, I suspect and hope that some company will produce a nice single wide (possibly cornering the market). My question is, “will they do so only for a premium” or will they continue to make nice, affordable mobile homes?

I enjoy my small park and land/home packages but as we buy older parks and lots we are confronted with the reality that those lots will not accomodate double wides in the future (at least not on a home/lot basis). What the future holds for that void is my question.

Your thoughts?


Re: Your Thoughts On A Changing Market - Posted by Steve-MO

Posted by Steve-MO on October 21, 2003 at 20:51:45:

I believe this will depend on the market in your particular area. What has changed in our area is the availability of financing, not demand, and as long as there is demand, someone will step forward to build those homes, and eventually finance those homes again. Now, some of us that are buying the repos are also financing those homes. People that were buying single wide homes for under $300.00 a month cannot all of the sudden afford double wides at $450 a month. The change is in the requirements for financing and I believe we may eventually see these double wides go through the same repo cycle we now see with single wides. My take

Re: Your Thoughts On A Changing Market - Posted by Anne_ND

Posted by Anne_ND on October 21, 2003 at 09:28:53:

I have recently helped a friend who owns a park with this problem. He has lots so small that only a 12 x 60 will fit on them. He was faced with either an empty lot or buying and fixing up the 1970 Blue Moon for several thousand. We did some investigating in his small city and found lots of other park owners who wanted to buy this home and move it to their parks, so we fixed up the home. It’s taken several months to get it fixed and then sold- but given the paucity of homes that would fit in that spot he did the right thing.

I’m looking at a park for sale that has the same problem: tiny lots and very old houses on them. I’m hoping this will be a negotiating point with the seller.

thanks for the great post!


As always, a well… - Posted by Greg Meade

Posted by Greg Meade on October 21, 2003 at 06:55:22:

thought out post. I also believe the financing will take care of itself.Requirements for home ownership should be tightened especially in the mobile arena. A pulse should not be enough to qualify anyone for a 69k loan on a box worth 18k. A recipe for heart break tomorrow!
An interesting question about older parks and the ability to shoehorn these monsters in is right on target. Walked thru a 32’ X 80’ Friday in Talahassee and these are behemoths.What i am seeing more and more of is folks buying these older mobile and rv parks and stripping them bare and reconfiguring them to accomodate these larger homes and to sometimes actually own these lots. Reduces the amount of spaces and puts upward pressure on lot rents(or cost of lot to sell). Lot rents are regional. In my limited travels, i have seen them at 95 per month including water and sewer in South Carolina, to 2200 per month(water and sewer extra) in San Luis Obispo, California!
Read a post in san jose about a rapacious rip off company charging 5000 per month lot rent in De Anza MHP in Santa Cruz, California.Rents in these reconfigured lots are 4 times what they were! I see a huge demarcation line in rents between huge corporate owned parks and mom and pop Parks. And also values!

Re: Your Thoughts On A Changing Market - Posted by Scott F.

Posted by Scott F. on October 20, 2003 at 22:15:26:


Great post, the major lenders “in time” will start to dry up a bit, but I think that a manufacturer will corner the market and sell them at a price that is affordable.

I too see many people moving there homes to private land building on foundations, but MH parks are not going anywhere and while there are parks people will still want a place to live with the pride of ownership.

I understand what you mean by having nice with your land packages, I’m purhcasing parks now and I know that is where my “cash flow” will come from, but as you stated we have many good years reaping from repo’s. (I did a bulk purhcase in Hidgdon, AL - got 10 homes 96 newer, market ready, del block & level for 90K) I just want to keep them coming, got another 100 or so to fill.

Again, your post was very refreshing and here’s to your success.

Scott Ferguson

Here’s my version… - Posted by Chuck

Posted by Chuck on October 21, 2003 at 10:22:11:

My personal game plan, should I aquire one of these parks, would be to strip it of old homes and replace them with the new mobile duplexes… a duplex built like a mobile home - 24x50 or so, turned to face the street… then rent/lease or condo them out with a monthly maintenance fee to retirees.

Re: Your Thoughts On A Changing Market - Posted by Seth

Posted by Seth on October 21, 2003 at 13:48:00:

I know what you mean. A new mh payment on a singlewide is $400 or more a DW is 5 or 6 hundred on 15 or 20 yr loan. Throw in another $300 for lot payment and in much the country you’ve got a pretty nice stick built for that money. I just don’t see how this is going to work it self out.

Re: Here’s my version… - Posted by Lyal

Posted by Lyal on October 21, 2003 at 19:28:48:

Does that mean one unit is 24x25? Sounds kinda cramped although it may work for our constant stream of med students at Mayo.

your version works for me. NT - Posted by Greg Meade

Posted by Greg Meade on October 21, 2003 at 16:03:01: