Posted by Dirk Roach on August 02, 2000 at 09:37:20:
Hi Jenn,
You maybe right on the buy the park theory.
As far as Trailer trash, just remember…
They are trailers when you buy, but Manufactured homes when you sell.
lol
Dirk
+55 Parks…been to that party before, no thanks - Posted by Dirk Roach
Posted by Dirk Roach on August 01, 2000 at 18:49:16:
Also in my Market (San Diego) there are a large number of +55 parks. In fact a large number. The space rent is cheap (around 300 bucks or so on average) and wow, what great deals you can get in there. I can buy Mobiles all day long for $2,000. Of course, this is because of obvious reasons, such as death, illness, etc.
However there is a dark side to +55 parks. And that is that they are +55 Parks. Your sell market is incredibly limited.
I have done 2 deals in a +55 park. I did these back when I figured I had come upon a new thing. I mean no one, no one was doing Lonnie type deals in these types of parks.
So I thought what a bunch of smucks, I’ll clean up.
Now shame on me, because I’m usually a little more on the ball than that. What a NIGHTMARE!
Now not to brag, but I have done a few mobile home deals, and usually can turn them very quickly. Suddenly I found myself at my wits end.
First of all one of the parks had a tenant association, which was very much like a condo association. Which basically meant that not only did the park have to approve the new buyers, but the all the tenants had to, also.
Now I don’t want to be viewed as having an ageism outlook, but these folks were downright cantankerous. Of course who knows, maybe I will be the same way when I’m older. Heaven knows I have a bad habit already of being stubborn.
Anyhow these folks would have meeting after meeting to decide every little issue regarding their “kingdom” as I soon began to view it.
I think in all I went through SEVENTEEN potential buyers, before I finally got one in that everyone liked. And on top of that I wound up owing favors and the like to Association President and Treasurer.
In fact my buyer I am happy to admit after some campaigning and the like (heck I made her up flyers for her to pass out) is now on the association board herself. And very happy being one of the ruleing class there.
In the other +55 park, it was not as bad, thing was the woman who was in the home before I got it died, and it had a big black stigma to it.
That is fun fact to work with when you’re trying to sell something, let me tell you.
Now as everyone knows people like to gossip and talk in the mobile home park, but at least that is somewhat broken up by things such as work etc. in the course of the day. Not so in the +55 park, not only did everyone come out and want to talk with my potential buyers, they felt somehow obligated to give them a run down on what had happened in the home, namely the death. And of course a running commentary on how to negotiate with me. Oh yes, EVERYONE had some price that they came up with for what I had paid for the home. Although none of them were close, I have no idea, how they came up with some of the numbers my potential buyers ALWAYS brought up.
Now let me go on record that I never “forget” to disclose anything in my mobile homes (I personally feel that it most likely will come back to haunt you if you do things like that, and besides life’s way to short), I feel that the upfront approach is always best, but man, talk about messing up your rhythm. Then trying to do a deal, when you have 50 3rd bass men/women “helping” you out.
Anyhow I sold both of these homes…FINALLY! I did okay, because I bought them right, (they were part of a bulk purchase from Conseco, I bought 23, these were a couple of the fun ones, that were kind of snuck in on me, yes that’s another fun aspect of dealing with a big lending institution, but that’s another story).
So I was only into them for a few hundred going into the deal, ADD 5 MONTHS SPACE RENT to that, and here I am at a normal Lonnie deal. Geeze. And gray hair to boot.
So okay, I’m jaded from my limited experience in the +55 Parks. However I would like to make a personal observation about myself, because who knows better?
I went into these deals, thinking that it would be pretty much open and shut. (unfortunately I was right, at least in regards to my wallet, it seemed to open and shut a lot). And at the time I figured why not sew up a couple of +55 parks so I can cover that market too. I mean I’m in San Diego, you bet we have snowbirds here. But what I didn’t realize is what a tremendous inefficient use of my time, those two little deals where.
Remember I said that I bought 23 homes, in a bulk purchase. Let me break this down a little. 5 had to be moved, which I sold for cash to people with their own land. (In this case 2 went to Mexico, and 2 went to an Indian reservation and 1 went to a farm, for storage). 15 of them I sold aka Lonnie/Earnst style. On terms. And then the 2 +55’s.
I had all 21 deals done in a matter of a month and a half. The +55’s took 5 months.
But that’s how it goes sometimes. All markets, all businesses have up’s and down’s. Just take my advice folks, try to limit the amounts of downs when you can.
Dirk
“…And very happy being one of the ruling class.” - Posted by Frank(icetime)
Posted by Frank(icetime) on August 03, 2000 at 13:07:31:
Dirk,
Best laugh I’ve had all day. Maybe you should be a writer, just be sure to get a spell checker (hehehe).
Thanks, Frank
Re: +55 Parks…been to that party before, no thanks - Posted by Eric C
Posted by Eric C on August 02, 2000 at 09:52:42:
Hi Dirk -
Thanks for the information on your experiences with the +55 parks.
Would owning the park(or parks)make a difference in your strategy?
If you think I’m somewhat curious, you’d be right. Currently, I’m in the midst of acquiring a midsize complex (180 units, all duplexes)built on a very large piece of land in a great community. My thoughts are to improve the units, add amenities, and move this property into private ownership.
Of course, I also plan to put a few mil(actually more) or so in my pocket at the same time.
And I don’t think that Jenn-Fla’s take on the senior market is completely correct. In my market area, other factors could also drive developers to target this demographic.
Yours,
Eric C
Re: +55 Parks…been to that party before, no thanks - Posted by Scott Ayres
Posted by Scott Ayres on August 02, 2000 at 01:32:30:
Excellent post Dirk! Folks reading this can save you a LOT of hassle. Few marketplaces in this kind of business are consistently limiited as the 55+ parks.
Scott A. (OR)
Re: +55 Parks…been to that party before, no thanks - Posted by Jenn-Fla
Posted by Jenn-Fla on August 03, 2000 at 14:35:08:
I’m not sure that I understood your follow-up…
You’re purchasing a development of currently rental duplexes and transitioning to private ownership… potentially to an all-senior market? Is this a mobile home park or stick-built community?
I can certainly see the point of targeting an all-senior market and do realize that they are an excellent target market for all types of homesale scenarios… my point was only that in the mobile home park business, according to some of the experts who have developed and “rescued” many parks, the +55 market is not necessarily the best marketing strategy if you want to remain fully occupied. Which led me to my statement about park owners keeping their parks +55, when there are already so many that pose competition for that market, and so few for families, it doesn’t seem like the most reasonable perspective. I stand by my statement that I believe many owners stay +55 because they don’t want to be bothered with the management dilemmas they foresee when dealing with families.
I’m sure you’re very excited about your potential success with your venture… Good Luck.
Hey! Maybe with some patience, we can just buy the Park! - Posted by Jenn-Fla
Posted by Jenn-Fla on August 02, 2000 at 09:22:16:
Thanks for all the discussion on the +55 Parks!!! Pretty much confirms that we don’t want to go there! At least, not in the sense of buying and selling individual units… but perhaps as the market swings and these park owners realize they are dealing with a lot of vacancies, they’ll be inclined to sell!
I assume that a lot of people who enter into park ownership have the assumption that they will be better off limiting their market to seniors so that they can avoid the “trailer trash” crowd. I’m actually starting to be irritated by that term as I get more and more involved in this business… I’m starting to like “trailer trash” actually!! The majority of these people are decent people who will thrive if given the right opportunity to own and take pride in their investment.
Thanks again for the informative discussions!
Jenn-Fla
Re: +55 Parks…been to that party before, no thanks - Posted by Eric C
Posted by Eric C on August 04, 2000 at 01:13:37:
Hi Jenn -
You’re correct; this particular project is a stick-built community with lots (LOTS!) of extra land to go along with it. Full city utilities, all paved roads, park grounds, and every federal busybody you can think of.
Currently, it’s in distress to say the least. However, it’s not the only project that I’m tracking at the moment. I’ve got another self-storage facility already in development, a little land (about 20 ac) to subdivide, and I’d really like to develop a small MH park (from scratch) to get some experience in that arena. Hopefully, all this year.
Your market is much different than my own (covering most of Texas and New Mexico). While I would agree with you about the lack of parks for families, I would also point out that in my area there are few decent parks – period.
I’ve managed to identify what I believe to be a significant market segment that will allow me the most flexible scenario for a park type situation. And I’m willing to bet some considerable money of my own in the process.
Although I’m looking forward (sort of) to the rennovation project (the duplexes I mentionned in the other post), I have to tell you that I am NOT looking forward to spending the next 2 years of my life with it. The only reason I’m in this deal is the money. No matter how it goes, I’ll make out nicely. Full or empty won’t really matter. But it makes me tired just thinking about it.
Good luck with your projects too; I appreciate your posts and your insights.
Yours,
Eric C