Land Leases and modular homes

[Wally Ballou]

I may know the answer to this, but I ask anyway......
I have been asked to appraise a 60 acre site, proposed to be developed with pads (mobile home park style) which would be leased.
The improvements will be modular homes of 1,200 SF or so.
The homeowner would purchase the home from a few styles, and the home would be delivered and bolted to a knee-wall foundation on the pad.
The homes would be about $100,000, and the pads would lease for about $2,800/mo each.
Simple question - What has the homeowner purchased?
And - what happens if the development fails after the first dozen or so homes are paid for and bolted down?
(I am a bit busy now and may be slow to respond to questions - apologies)

 

[TerryRohrer]

$2,800 per month for a trailer site? Or $280? If it is a long-term lease, the tenant would have a leasehold interest, but has not purchased anything but the right to use that spot for the duration of the lease. I would say if the land is mortgaged, the lender may well end up owning the land and homes unless they are financed as personal property with UCC filings, in which case the home lender might get the homes. The homeowner may well leave with less than they came with. I'm guessing the proposed arrangement likely skirts one or more of subdivision laws, condominium laws, securities laws, etc. Don't believe I would want any part of the situation from any standpoint!

 

[Wally Ballou]

$2,800 per month for a trailer site? Or $280? If it is a long-term lease, the tenant would have a leasehold interest, but has not purchased anything but the right to use that spot for the duration of the lease. I would say if the land is mortgaged, the lender may well end up owning the land and homes unless they are financed as personal property with UCC filings, in which case the home lender might get the homes. The homeowner may well leave with less than they came with. I'm guessing the proposed arrangement likely skirts one or more of subdivision laws, condominium laws, securities laws, etc. Don't believe I would want any part of the situation from any standpoint!

$2,800/month - northeast USA

We are going to kick it back to the lender.
I just don't see it happening.

 

[Russ Kitzberger]

I can see how it would scare off a few appraisers. You have a leased fee interest/leasehold interest.

High-level demand market analysis to meet Fanning standards, with demand-side analysis since it is not established in the market. Perhaps going to Hawaii for leasehold sales or another location to draw data from.

Just takes time and $$ to complete the analysis. Seems like an interesting project that could be worked on for a few months.

We have national reciprocity and temp licensing for a reason.

 

[Dublin ohio]

What has the homeowner purchased?

A headache

 

[Terrel L. Shields]

A headache

However, any idiot who would buy into such tripe deserves all the headache they get.

I have been asked to appraise a 60 acre site

As a trainee, what are you appraising? The land? The MH? The MH on a leased fee estate? Sounds like you are appraising the whole site- a commercial land development...Hope you have a good CG mentor, so what does he/she say?

 

[Dublin ohio]

Sounds like a scam in the making. Modular home typically cannot be disassembled. Who would finance such a thing for the buyer. Is the modular going to be classified as personal property. It cannot be real property. What happens to the modular if "owner" defaults on lot lease. Like Terrell said. Buyer would have to be an Idiot.

 

[JTip]

$2M+ a year coming in....wow.

Are you sure they are modular and not manufactured?

What amenities do these pads offer? Utilities? Shared olympic pool with a 5 star restaurant?

 

[Terrel L. Shields]

$2M+ a year coming in....wow

by any conventional metric, GRM comes to mind. $2800 a month translates to 2,800,000 - 5,600.000 PER LOT... And any investment making 5%...nice...

 

[Ricky LaFleur]

Glad to know if I ever move to NY I won't be able to afford even a mobile home pad. Seriously though, $280/mo here is high.