| Question : |
Why should homeowners living in a mobilehome park consider organizing for purchase of the park? |
| Answer : |
Homeowners should be prepared to act on a park purchase when their park owner decides to sell. If you wait until the park owner has listed the park for sale with a broker, it may be too late. Many homeowners who have wanted to purchase the park, but failed to take action have found out too late when they received a rent increase notice from their new park owner. You can simply form an association of homeowners who are interested in purchasing the park. Formal incorporation of your homeowners association is not required at the outset, but will be necessary if you plan to do a direct purchase of your park. |
| |
|
| Question : |
Can homeowners just approach their park owner directly and ask them to sell the park to them? |
| Answer : |
Yes. However, the purchase of a mobilehome park is a complex transaction requiring expertise in real estate contracts, negotiation, finance, and property management, to name a few. Depending on your past relationship with your park owner, there may already be a strained relationship which would cause your park owner to be reluctant to deal directly with the association on a complex transaction. Many park owners simply will not deal directly with homeowners believing that they are “over their heads” in trying to approach such a transaction. To the park owner selling to an investor appears less complicated and less time consuming. |
| |
|
| Question : |
How can ROP assist with the initial park owner contact and negotiation? |
| Answer : |
If your Homeowners Association signs an engagement letter with ROP, we will then contact your park owner on your behalf. Many park owners will respond favorably to such communications believing that the homeowners are serious enough about purchasing the park that they have engaged the services of ROP to represent them in the process. ROP will initially contact owners by letter, and follow up that initial contact with phone calls offering to meet with the park owner to discuss the possibility of a purchase and the financial advantages to the park owner by selling to nonprofit ROP. As an IRS-approved tax-exempt corporation, ROP is entitled to use tax-exempt bond financing which can reduce the interest rate on bank mortgages, and enable the selling park owner to receive tax-free interest payments on any portion of the selling price that he may be willing to carry. Such tax-free interest payments provide a strong financial incentive for park owners to deal with ROP, because such tax benefits are not possible if the park owner sells to another private investor. |
| |
|
| Question : |
How long does such a transaction usually take to complete? |
| Answer : |
The timing of the transaction can be arbitrarily set by the park owner. If a park owner says that he’s willing to sell but that the escrow must close in 90 days, it is possible to close in 90 days, but not if public financing, grants, and other state loan programs are being pursued. If your park owner allows 4 to 7 months to close the transaction, ROP will then have the time to pursue financial assistance from the local city or county where the park is located and to seek state low interest loans which will assist in the purchase of the park. The shorter the escrow the more likely that purchase of the park will need to be financed by conventional loans. |
| |
|
| Question : |
If we are able to buy the park, will our existing rents increase? |
| Answer : |
Some rent increase is usually necessary in order to finance the nonprofit or resident purchase of the park. Whether your rents will increase for the park purchase cannot be determined until the park owner states his asking price and ROP has determined the available financing from banks, and other sources. By supporting a nonprofit ROP or resident purchase of the park, homeowners gain long term control of their housing costs. By gaining nonprofit control of park ownership, homeowners can gain long tern security and know that they will not be priced out of their homes by repeated for profit resales of the mobilehome park, which will result in dramatically increased space rents. |
