It almost never fails that any mobile home community you go to will request that you “fill out an application prior to [you] purchasing an individual mobile home inside our park.” Every park will have its own approval process, and every park will require its own criteria needed before any potential resident buys or rents a home inside the park’s walls.
If we take the side of the park manager and park owner, it is very wise and prudent to know exactly who is moving into the park. Is this potential buyer a murderer? A pedophile? An eviction prone tenant? Or just a regular bill-paying, credit conscious, hard working home buyer?
Below are 3 common mistakes that mobile home investors and home buyers make too often.
3 Mistakes Mobile Home Investors Make
You will be a stranger to most park managers when you first meet them. If you begin your relationship with any type of lie, you risk ruining the entire relationship forever. Remember that park managers will oftentimes run your background, credit, eviction status, job history, etc. before approving or denying you to be in the park.
Do not lie! You will be caught.
Instead, be honest and upfront about your past. If you committed an offense or violent crime, you may have to understand most parks will simply not want to even try to work with you based on these charges along. For most of us, however, a less-than-perfect credit score or a past bankruptcy is not a death sentence that should keep us from mobile home investing in parks.
When you are proactive about telling a park manager about your past goods and bads, there can often be ways to work around these issues. Perhaps a co-signer with better credit can be on the lease in addition to you, or perhaps you can make a double or triple deposit to put the park manager’s mind at ease should you default.
Investor Tip: Try not to explain for more than 10 seconds as to why your poor credit is the way it is. Park managers have heard emotional story after emotional story from potential applicants all week. Instead, embrace your past and sprint forward.
Some parks will understand you are an investor and therefore will not be living in the manufactured home yourself, but rather will be simply reselling it. In a small minority of parks, you may only need to provide your business card in order to be approved.
Most parks, however, will want a basic understanding of your credit, criminal, eviction and employment history. Be aware that occasionally some parks will have their “approval bar” set way too high. Make sure to know what each park requires concerning background and beacon-scores of you and your buyers. If the park is too strict, you may want to reconsider investing inside this park.
Related article: Three types of mobile home parks and how each tend to deal with investors
Bonus Investor Tip: Know your own credit score. Keep up-to-date on your credit with free online reports yearly.
2. Not Getting Approved before Buying
It never fails that I hear monthly about a new and unaware mobile home investor or buyer who did not know to get approved at the park office prior to purchasing the mobile home from the seller.
Next, the investor went to the park office to say “Hi,” and now there is an unexpected problem. This “unexpected problem” often comes up due to a few reasons:
The person you just purchased the mobile home from owed back lot/pad rent and late fees.
The person you just purchased the mobile home from and the actual mobile home are now being evicted by the park.
The park has rules that state any new homeowner has to install new decks, siding, and a shed within 90 days.
If you plan to move the home, you must give the park 60 days notice. This is only a problem if you plan to remove the home from the park.
The park does not accept minors living in any of the homes, and this is unrealistic for many of your buyers.
All of these have been experiences from others within the past few months alone. Whenever I hear this, I cringe because it most likely means a seller lied or misrepresented their situation in order to sell their home for more than it’s worth.
With regards to past-due payments, most parks require the new owner (you) to be responsible for paying the seller’s past due amount as soon as possible.
Related article: Who pays for past due lot rent?
3. Not Maximizing Your Connection
There are more reasons to seeing a park manager prior to closing than just saving money, making more profit, showing respect, following protocol and knowing what you are truly buying before you purchase.
When a park manager knows that you know the rules and understand how to follow directions, it can really help the relationship start off on the right foot. Think of a park manager as a friend you haven’t met yet.
While some park managers are firm and others are goofy, it is your goal to leave the park manager’s office knowing a few things:
Whether you have the park manager’s permission to invest within their park.
That you conveyed to the park manager your plan and how you intend to help their community.
That you let him or her know types of properties you are looking for.
Which homes are for sale by the park and which homes are for sale by owner-occupants within the park.
Park rules and applicant screening criteria.
That you learned other relevant park information and asked rapport building questions.
Investor tip: First impressions are so important when it comes to meeting local park managers face to face. Keep in mind many community managers may live in the park as well as manage it. These park managers should like and trust you from the beginning. Strive to be known as the person who actually does what they say they are going to do.
Be polite. Remember that working with park managers is infinitely easier than working against a park …read more