Mobile Home Park Homes - Selling POHs on contract

[P. Ian Arbogast]

Good afternoon. I'm new to BP and wanted to float a question to those of you more experienced investors. We own a couple of smaller Mobile Home Communities in VA where the residents own the homes and we own the land. We are looking to acquire more communities but it seems most of the communities we're assessing in the Southeast/Midwest come with significant park owned homes (POH). Has anyone had success buying, and subsequently converting, a predominantly POH community to a lot rent only community through contracts or RTO? Thanks for taking the time to respond.

[Craig Sloan]

@Mindy Jensen is absolutely right.  You can do it but it is slow going.  We have been working on it for years in a couple smaller parks that we own.  Most people do not complete their contract, which isn't always bad.  Each time you resell the home you get a new down payment.  If someone completes their contract your revenue from that home is reduced to LRO.  If they don't complete the contract you resell and continue to generate more income.  I realize you have the hassle of rehabbing the home and re-marketing it every time... but sometimes you just have to make lemonade out of lemons.