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A lot of our clients come to us when the park is in disrepair and have issues getting it back up and running. If you own a mobile home park you know that the cost of maintenance is very expensive. This is particularly true when you’re dealing with parks in harsh climates. Areas where the weather gets very cold or hot can cause the pipes to freeze and crack. It can wreak havoc on your water supply system and can create tens of thousands of dollars in lost income and repair costs. So what do you do in such situations?
Fix the issue vs. Selling the park
First you can fix the issues. This will require serious capital contributions and time. With the market being what it is today, cost of repairs and labor has increased significantly. Often it will not make sense that you have a significant repair costs for a property. This is particularly true if you have already owned the park for a significant period. In such cases fixing the issue can become so expensive and time consuming that selling would be a better option.
Fixing the issues associated with the park also have various benefits. First, it will allow you seek the improved assessment value. It will also allow you raise rents and attempt to recoup part of your investment. However, in most cases you will find that fixing the park will not make financial sense. In fact, it can result in losing the park. When you have to conduct repairs on the park you may have issues with tenants leaving. In such cases this will impact rent collection and can send the property into default depending on the mortgage on the property.
Another problem with repairs is the cost of labor and your expertise in these areas. If you’re skilled in managing a crew to fix the pipes or change or treat the well water or septic issues, repairs will not be a big deal. However, if you have no experience in these areas you will find the cost of repair almost unbearable. Often times the cost of these repairs can balloon and eat away at the value you’ve earned over years of ownership. Thus, making repairs un-feasible option.
To get started on selling your mobile home park in Riverside County, call Oxgord MHP today.
Selling the park has another consideration. When you do the math, it may make more sense to sell the park. In such cases Oxgord Mobile Home Park is the ideal option. We do not work with brokers and as a result you do not pay the fees associated with the transaction. This means you do not pay the 5% broker fees, which can come to savings of over $100,000.00 or more depending on the size of the park. We also cover all closing costs associated with the transaction. Finally, we will work with you on a 1031 exchange, so you can avoid tax implications if that is your choice.
If you look at the offer’s we make and the terms we provide Oxgord is the best choice when it comes to the sale of your park. If you prefer to be involved in the deal and negotiate the terms on your own without involvement from a broker, reach out to us direct.