Getting started on a MHC

[Debbie Bullock]

Hello, everyone. A friend pointed me in your direction.

My husband and I have a bit of land about two miles out of town. Our county is in the process of laying rural water lines. We have thought about the possibility of renting out trailer lots. Mostly, we'd have to put down a septic system for each one. The individual would have to be responsible for a deposit on a water meter. Is it true (I read this somewhere) that if you place two or more trailers on a section of land that it is considered an MHC? We are wondering where to start. The lines have yet to be laid and hooked up so there is plenty of time. I want only nice mobile homes moved onto the place and we have plans to make it as pretty and pleasant as possible. We've had rentals (houses, not trailers) for years but have decided we DO NOT want to supply the mobile homes, merely the lots to set them on. Any ideas or pointers for beginning this? I've spoken with a manager of another community and she gave me a copy of their contract plus I've found an even better one so that won't be the problem. We simply don't know where to start other than marking them off and getting the septic tanks installed.Thanks.

[rmurray]

The first door to knock on is your local building officials...Most counties have extensive regulations in the zoning code and restrict manufactured home parks to specialized areas...the building codes often require extensive improvements..some even require environmental and local services studies..Often small parks are not allowed.....Then..I would check with your local state government...some have extensive state laws governing manufactured home parks...Even the terms of the lease can be regulated...

Almost every state has a manufactured home association..they will be a big help..you can find yours in the yellow pages here on this site..

Candidly..you could not be picking a worse time in the industry's history for this project...Big..very nice 4 or 5 star parks are doing fine in areas with high land costs...but small rural parks are doing very poorly now...Financing has all but gone away for this business..Even the few who do qualify will have to pay VERY high interest rates (10 to 12 % for new..12 to 15% used) and have larger down payments than if they bought the land..So..if land is easily available in your area (current mortgage rates are about 6%)..consumers would be foolish to put a home in a park..

Most parks in areas with available land have gone to buying used homes..setting them into their park and selling them on contract..Good Luck

[Matt]

I have a large parcel of land within the city limits of a small city of 65,000 mostly blue callar type city. I have one of the only peices of land that will allow a MHC within the city limits. I am looking to grow this over the next 8 to 10 years for supplemental retirement income. I am just beginning my research. I would love any suggestions as to how I might determine the demand in this area. I have spoken iwth several real estate companies who all say there is a great demand for this type of housing, one of which did a specific study 6 months ago which showed the 3 existing parks were consistent at about 94% occupied to possible spaces.

I know there is ton of additional research i need to do and I have already selected some books on the subject. I look forward to any other suggestions you may have for getting started.

[Dale]

After over 32 years in business, my 44 lot park in a highly desirable area is experiencing more vacancies recently than anytime since the mid 70's. Back then the interest rates on mobile homes were in the 18% to 22% range. I still have about 90% occupancy, which is far better than my competition, but as the area continues to boom with new house construction, the interest in renting lots has almost stopped. There seems to be no shortage of people wanting to rent mobile homes, but I am determined to avoid that business, if possible. Many parks in the area have already sold out and been converted to commercial or residential properties. I am sure that the decline in financing options is to blame, but there are thousands of people who already have mobile homes financed or paid for and they have stopped inquiring as well. I can just hope that something will happen to improve the situation for mobile home park owners who only rent lots.