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Updated about 4 years ago on . Most recent reply
Separating Mobile Homes from Land
I am purchasing a 12 lot MHP and the park owns the mobile homes attached. I want to get advice on how to go about separating the mobile homes from the lots at close. Ideally, I would have the mobile homes owned by an LLC and the land owned by another LLC. I plan to sell the mobile homes to the tenants or empty ones to another buyer in order to decrease the park's expenses AND have just income producing land (which would be better when it is time to refinance).
If you have done this before or have knowledge, what are the steps needed to separate buildings and land at closing?
Most Popular Reply
Your closing/title company can help put this together for you. It's a one page addendum that lists each asset separately and its portion of the loan. Just talk with your lender and agree on a value for each home that when paid will release it from the loan.
The second part is where some salesmanship comes into play. You have to structure the deal where its a good deal for the resident to want to buy the home.dont expect them to jump at the opportunity to pay the same or more and take on maintenance and repair as well. Each situation will be different and you'll have to sell them a little differently (butmake sure you treat each resident the same, can't stress that enough).
What we've done with some success is to tell the residents that we are selling the homes, no ifs ands or buts. We offer them a sweetheart deal, usually a lease option with "time served" as the down payment. If they reject it, we'll try to sell it to a MH investor with a tenant in place (that's never worked yet). At that point, we usually just wait for them to end their lease assuming they are paying, etc. The new resident will then purchase or LO the home.
We have never forced anyone out of a POH who was performing just because they did not want to purchase the home. It's just part of the deal sometimes - you can't be in this business without being in the home business in some way. It will take some time to sell them all off.
The second part is where some salesmanship comes into play. You have to structure the deal where its a good deal for the resident to want to buy the home.dont expect them to jump at the opportunity to pay the same or more and take on maintenance and repair as well. Each situation will be different and you'll have to sell them a little differently (butmake sure you treat each resident the same, can't stress that enough).
What we've done with some success is to tell the residents that we are selling the homes, no ifs ands or buts. We offer them a sweetheart deal, usually a lease option with "time served" as the down payment. If they reject it, we'll try to sell it to a MH investor with a tenant in place (that's never worked yet). At that point, we usually just wait for them to end their lease assuming they are paying, etc. The new resident will then purchase or LO the home.
We have never forced anyone out of a POH who was performing just because they did not want to purchase the home. It's just part of the deal sometimes - you can't be in this business without being in the home business in some way. It will take some time to sell them all off.