@Lisa Eckman this is a process called a PULL-OUT.
An investor will purchase an old unit with the intent to remove the old unit from the park and replace it with a brand new unit. Park approval is required in almost all cases. They also typically require you to bring in a new unit that meets a certain set of specs (size, number of bedrooms/bathroom, etc.), and in some cases require you to purchase the new unit from a specific manufacturer.
Many parks (especially parks with older units) typically don't have a problem with this because it brings in newer units to dress up the parks and in some cases increase park value. The only ones that will balk at the idea is if they already have an investor group in their back pocket who does this type of business and they have exclusive rights to the park, or the owner does it themselves.
In CA, you need to have a dealers license or retailers license to purchase and resale a mobile home that is not permanently attached to the foundation. Under the SAFE ACT, California does not allow a person to buy/sell a mobile home without a license, unless it's going to be your primary residence, then there is nothing stopping you from buying a unit directly from the seller.
I am a real estate Broker and can buy/sell a mobile home on a permanent foundation because it is then considered REAL PROPERTY, and I can represent a seller/buyer with these types of REAL PROPERTY mobile homes.
I partner with two investors in SOCAL who do these PULL OUT projects, but I'm just the private money on deals they put together. They have the connections with the park managers and have dealers licenses to offer this type of service.
Their last project was in the Harbor City area where they bought an old unit for around $30K. Paid to have it removed and brought in a new unit that was around $85K base model and then another $20K to $25K in upgrades. They have all the contractors in place who know how to set the unit, make it earthquake safe, attach the gas lines, add in electrical boxes, build the carport awning, landscape, etc. It's a project and you NEED the connections to those who know how do to the work. With some rain it took them about four months to complete and close escrow. Normally they like to be out of the deal within 2 months.
They had the unit sold before it was even completed and it sold for around $264K in a 55 and over park. They were all-in for around $185K (including holding cost and a few months of park rent while getting the new unit in place).
I'm currently in negotiations with them on another PULL OUT project in Pomona and another one in the same park as described above.
This IS NOT a simple process and you absolutely need to have all the connections, proper licensing, etc. OR be in a position to be the private money investor like me on these projects and let the experts do all the work with PULL OUTS. They have the licenses, the connections, the park manager relationships, etc.
I make a 7% PREF on my money while it's tied up in the project and 30% of the equity upon sale. I'm also the first money paid upon closing. FIRST IN and FIRST OUT. They handle everything else and have about 20% of the cash into the deal. I fund the other 80%.
As for your comment about creating a seller financed note. Make sure you read up on DODD FRANK guidelines before going that route. Most who do this type of business ignore the Dodd Frank guidelines, which is a FEDERAL RULE and applies to all states.
Here is a great YouTube video explaining what you can and can't regarding Dodd Frank, if you are not a licensed loan originator.https://www.youtube.com/watch?v=wBSdQRd_Pu8&list=WL
Good luck and stay in compliance.
Disclaimer: I'm a licensed real estate Broker in CA and the above comments are simply my opinion based on my personal research and experience. I'm not an attorney or giving any legal advise. Consult with your state guidelines and with an attorney for clarification. Any investment is risky and has no guarantees.
