In this blog we’re going to share with you guys one of our worst deals yet. And how, if you work with the wrong park manager, they can turn a good deal into a nightmare.
Let’s paint the picture first
So this home was actually a 1980s home. We bought the home for $3,500. It needed no repairs.
Our buyer actually got accepted to a community college that was in the local area. And her dad was like ‘Hey, this is a great opportunity for you to get out of my house and live on your own. So I’m going to help you. I’m going to purchase this home for you.’
We sold this home to her for around $14,000 plus interest because we actually collected payments from her on it. So in total we received around $17,000 on the home. And we were really happy with this. We’re like ‘This is a great deal!’ We bought the home, we didn’t have to do any repairs and we sold it quickly.
She put $2,500 down on the home and she was paying us $305 per month and she never missed a payment. She was always on time. She was one of our best clients. She was happy, we were happy, it was a win-win.
One year later…
So we’re about one year into this. And then we start to get calls. We were expecting the usual call to let us know that she had made the payment, but this call was a little bit different.
She was actually calling us to say ‘Hey, I’m getting harassed. They’re threatening to evict me because they want the entire house repainted. They’re saying that the paint doesn’t match with the other homes and the quality of the park that they want to see.’
She didn’t have a ton of money. Her dad said ‘Hey, I’m going to buy the home for you. But I’m not doing anything else to the house.’ Long story short, she actually was able to find a friend who was connected to a painter and they were able to help her out and paint the entire house for free.
Then exactly two months go by. We got another phone call from her. It’s again negative news. She tells us the park is threatening to evict her again because of her dog and dog faeces everywhere.
Now with her dog she usually keeps it inside the house. She’s said she only takes him out every time he has to use the bathroom, and always picks up after him. She said that faeces that’s left around couldn’t be her dog. That’s not her responsibility. The park was deeming it her responsibility and actually trying to evict her.
And then we got another call a few weeks after that saying ‘Hey, I’m actually getting evicted. The park is saying they have no record of my Lot Rent paid. And I know I’ve paid it.’
She was really upset. She said she had been paying her Lot Rent in cash. This was one of the very few parks that accepted lot rent payments in cash. But there was just no record of it. And the park was now putting in an official eviction process. Because she didn’t have a record the court sided with the park.
The truth eventually came out
That point forward we were like ‘Hey, we’ll actually take the home back from you. We don’t want you to get an eviction on your record. And we’ll just replace the tenant, we’ll actually just resell it to someone else.’
But that’s when the truth actually came out.
We found out that the park manager was pretty shady. She was actually stealing the Lot Rent payment from our client and putting it in her own pocket just to get her out of the park. They actually were trying to get her out of the park. They had something out for her. They had an agenda from the top on down. They were actually trying to evict everyone that wasn’t 55 or older. They were having plans to change the park from a family park into a 55+ community.
So when the truth came out we saw she got fired, but the fact was that we didn’t have our great tenant anymore. And she was living in the home for such a long time that it needed repairs. So, when she actually left the home it was vacant for a couple months and there were actual squatters that came through. We’re talking broken windows, holes in the floor, holes in the wall, missing appliances. It just didn’t make sense for us to continue to pay the Lot Rent and make all the repairs to this type of home.
Here’s what we had to do
So after we got the home back we actually had a really big fight with the park to the point where we had to get our attorney involved.
Now, they had already got legal approval to change the park from a family park to a 55+ park. And they were actually bringing in a ton of newer homes. So our home was like that sour apple in the bunch. And at that point they had given us an option.
They said ‘Hey, you can move the home out of here. Or if you want to keep it here we’ll need you to make a ton of repairs on the exterior and you’re going to have to pay Lot Rent on the home until you find someone else that wants to live in the home and get approved by the community.’
The problem was at that point we saw the previous owner had done a ton of damage to the home and there were even squatters living in the home. So there were a bunch of repairs needed not just on the exterior but interior too. We’re talking a bunch of holes in the subfloor, missing and damaged appliances, ceiling repair – they needed a ton of work. So we were really pissed off at that time because our tenant was gone. Our cash flow was gone.
So we ended up saying we don’t want anything to do with this house. It’s not in the best area. We ended up just gifting it to the park and saying here’s the titles we just want out. We don’t even want to move this home. We just don’t want anything to do with it.
Because finding someone 55+ to move into that older home when they had already brought in newer homes, that just wasn’t going to be easy. It was going to take a ton of time making the repairs and going to be a ton of money. And again, paying that Lot Rent each and every month until we found someone else. It just wasn’t working.
What did we learn from this?
So what we learned from this is to be careful when you are looking to buy an older property in a park. Make sure you understand where the park management is going. If they’re going to be transferring their park from a family park to a 55 and over community. Don’t be afraid to ask questions.
And be sure you know the character of the park manager too because you’re going to have to deal with them. If you ever have to turn your tenants over that too you’re going to have to deal with. And so you want to make sure that you’re dealing with people you want to deal with.
So a big learning lesson for us. We didn’t lose any money. But man, it would have been nice to still be collecting
that cashflow. That was a good deal. It was looking like a good deal until park management got involved.
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