If you’re not sure about mobile home park regulations and rules, then this blog post is going to help you. We’re going to share with you 4 things you need to know before you buy your next mobile home.
Rule #1 Get qualified by the park
You’re going to want to get qualified by the mobile home community to own that home in their park. So they’re going to want to make sure that they’re getting a Lot Rent paid each and every month. They may ask you to sign something like a lease agreement which is going to require a credit check and a background check, just to verify that they’re going to get paid every month.
But we prefer to avoid doing credit and background checks. We do this by using storage agreements. Storage agreements just oblige us to continue to pay the Lot Rent each and every month until we find a buyer.
We like them because it’s more business to business, versus with lease agreements where you’re going to have your credit pulled and it makes it look like you’re trying to live in the community. We’re not trying to live in the community, we’re just using storage agreements, then we’re in and out.
But I will say storage agreements are a lot easier to use when you have your dealer’s license.
Rule #2 Park-required repairs
Now the park might require you to make any type of exterior repairs before agreeing to sign any type of lease agreement or storage agreement. Some of these repairs include landscaping upgrades, any type of porch or fencing, or even skirting repairs.
Make sure you verify with the park management of any park-required repairs to the exterior of the home before you buy the home. They could add up in cost.
So if it throws your numbers off, be sure to go back to the seller, and see if you can renegotiate with them. Because no matter which buyer purchases the home, they’re going to have to make those repairs. And the seller probably should have made those repairs a whole lot longer ago.
Rule #3 Lot Rent & Utilities
While you’re fixing the home, you’re going to be responsible for the Lot Rent and the Utilities. That’s what we call holding costs. So we try to always add on a few extra months of cushion just in case the repairs take a little longer, or even if the home takes a little bit longer to resell than we expected.
If you’re making any type of exterior repair that the park was requiring you, or even if they’re not, don’t be afraid to ask for two or three months of free Lot Rent. Because you’re taking the time to do the repairs and then sell the home. You’d be surprised at what type of deals you’ll be able to get just by simply asking the park manager for that two to three months.
Rule #4 Only sell to qualified buyers
Before you sell the home to your buyer make sure you get him or her qualified through the community first and foremost. Without getting them approved at the park you’re not going to be able to transfer your obligation of paying that Lot Rent each and every month.
So you want this process to be done as quickly as possible. We recommend that if you are going to be collecting payments from this buyer, go ahead and run the credit and background check on them first, before you send them to the park office, so that before they even step in there they’re going to be qualified, and you can speed up the process a little bit.
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