Owner Occupied Restrictions MH Park

[Chad Raggio]

Are there any known strategies to work with a park owner or manager that only allows Owner Occupied? I would like to purchase a mobile home that is in a nice park but they will not allow renters. Is there a way to partner with my new buyer/renter/occupant so they become the "owner" - but I'm still maintain control and monthly income? Maybe I "become the bank" and loan the $ to purchase the MH?
Any ideas?
Thanks - Chad

[Bill Gulley]

Do they have personal property, furniture, car, truck, boat, guns anything of value? Make them a loan and take the stuff as collateral, file a UCC form, put them on title with you, when the loan is paid off release the UCC and take your name off title. :)

[Chad Raggio]

Bill Gulley
Thanks for the quick response. If things went south, how would I evict or foreclose with a UCC?

[Tom Goans]

Chad Raggio,

I have a long and successful history of investing in manufactured homes in parks. I embrace this segment of cash flow as a largely untapped superior investment opportunity.

I have not pursued spending time trying to develop ways to invest where there are known restrictions of ownership – in this case, renting the property. The value of time. From what I have discovered, many parks with an owner-occupied restriction have owners that own numerous homes within the park that they rent. You would be their competition. Therefore, the elimination of the competition by imposing the owner-occupied rule.

I doubt there is a way to convenience the owner to allow you to become a partner or part of the competition. A well run park is a cash cow. The owner probably does not need your money. Should he desire a loan, the owner probably has the ability to quickly borrow from his favorite lender.

[Aaron Mazzrillo]

I would say this falls under the 'work smart, not hard' category. You are up against someone who can literally make your life miserable. Pass and look for an easy deal with a cooperative owner. I did a deal in a park with a 'no renters' restriction. I thought I could fly under the radar. I received a letter from an attorney stating that I had to sign a storage agreement and had 3 months to sell the property or move it out of the park. Luckily I sold it. Not a situation I want to be in again.

[Bill Gulley]

I'd say in that situation it would need to be someone that valued their stuff, have them sign the title and move or lose all their stuff, truck, bass boat, whatever. There is no lien on the home so you're in compliance technically and an owner does live there. Didn't say it would be easy to find the right person or do it.... I have for down payments, but really need good people to work with.

The other responses are good too, you might see if you can cut the park owner in on the deal to make life easier or sell it to them if you're real lucky.....they usually try to make life difficult, slap a lien on it and try to take it.

There is not a deal behind every door. :)

[John Fedro]

Hi Chad,

Get use to mobile homes parks not allowing you (or anyone) to rent or sublease within their park. This means that the physical Title and/or Ownership must convey day one to the new tenant-buyer(s).

When you stated earlier that you may "become the bank" remember that you are not lending physical money to anyone, the payment plan you create with your tenant-buyer is simply a condition of the sale.

With that said I use a combination of Personal Property Trusts and Unsecured notes to achieve a complete sale, legal transfer, and still protect my asset.

Bill I also really enjoyed listening to your method. That is a clever idea indeed. Also, you advice of, "there is not a deal behind every door" is spoken from experience. Thanks for your advice.

Hope this helps you see that there are many ways to still invest. The first step is finding a seller that will allow you to purchase their unwanted home and create a significant profit.

With regards to your question about partnering with a park manager or owner there is little chance of this until you prove yourself in the park, if ever.

Hope this helps.

Best,
John Fedro

[Ken Rishel]

There is truth in what Aaron wrote. There are some communities in which Lonnie Deals will be very unwelcome and others where they will value you as a partner.

The basic rule of thumb? The nicer the community, the less likely they are to welcome Lonnie Deals of any kind. Well run communities are desirable places to live and they do not need any help staying full, and normally do not want any rentals of any kind. (It screws with the cap rate.)

I am looking at buying an older community right now that is filled with older and smaller homes that are mostly rentals. My plan is to clear every one of those homes out as leases permit to refill the community with brand new larger homes. I do not believe there are any Lonnie Dealers operating in there, but if there are, it will be difficult for them if I do buy the community, because the marketing plan does not call for any homes in the community that are not brand new and resident owned.

I would suggest concentrating on the communities that really need your help. You might be surprised at how much help communities like that just might give you in return for you helping to keep their community full.