August 15, 2003

Mobile Home Park Owner News

August 15, 2003

Current News

Market Conditions

Haven’t we all been busy? Money hasn’t been this cheap in a long time. A lot of refinancing is going on. But where is the market really? Let’s look at the facts:

  1. Vacancy Rates are very high, averaging 15% to 20% in most markets.
  2. Shipments are still way down.
  3. Only a couple of lenders will do chattel financing for a MH going into a park.
  4. Mortgage rates are so low; it doesn’t make sense for a consumer to move into a MHP.
  5. The industry is going “residential”.

Bottom line? There is little or no support for the MHP’s. I tried to warn everyone this was coming. One year ago to even six months ago, your park was worth 5% to 15% more than it is today.

We are near the bottom, but it is going to be 3-5 years before the dust settles. And the picture will be quite different when it does.

So what now? I am about solving problems. I see a few options available to you as the owner of a MHP.

  1. HANG IN THERE. And upgrade as much as you can while you wait. If you have the reserves available, I strongly recommend it. Quality of life is going to be the #1 marketing tool/ service in the next 3-5 years.
  2. Open a dealership as part of your community and finance homes yourself. You will need some capital and a good salesperson. You will need to manage it as well, but there are huge returns there if you work it.
  3. SELL while you can. If your quality of life depends on this asset, it is going to go down for a little longer. If your park isn’t as nice as the one next door or you don’t have the reserves to upgrade, your value will be dropping too.

The recent mergers in the industry mean something to everyone (Hometown/ Chateau & Berkshire/ Clayton). We are in an economy of consolidation. I do not believe Hometown or Berkshire overspent. They are very frugal. How will you look in the future to a big company? If your position isn’t going to be stronger tomorrow (3-5 yrs) than it is today … well, you can hear the great sucking sound.

 

New Services

I have had a great education over the last few years and the 9+ years in the business helps too. I get asked for advice on purchases or next steps frequently and I enjoy it thoroughly.  Therefore I have expanded my services to accommodate the growing need for change.

My primary function is investment associate. Listing and selling MHP’s is my specialty. However, Site selection and management is a growing part of my business. As well as consulting all the way through the process. If you have a need or are interested in how I can help you or my fee schedule, please contact me.

 

Product review

At the Louisville show I picked up a product you should have. If not this one, something very, very similar to it. It is the MHC Management System by Syrasoft. EASY to use and navigate through. It shows and does everything I have ever conceived needing and then some. If you didn’t get a sample call Joe Grotto @ 1-800-817-7706 or visit their website www.syrasoft.com. You need this system.

 

Contact for comments, input or information

Jim Carmichael (859) 371-9000 fax (859) 371-6365 or jcarmichael@firstcommrealty.com.

F1RST COMMERCIAL REALTY, INC.
8174 Mall Rd
Florence, KY 41042