mobile home park conversion

[Don Ashbaugh]

A client has contacted me regarding a project he has coming up. Here's the situation: a mobile home park will to be converted to a condominium complex. Each of the mobile homes will be set on a permanent cinder block foundation and the respective owners will collectively own the land within the complex.

I want to gain some insight as to what will be necessary from an appraisal perspective before I talk with him again. Thus, the issues I raise for this forum are: 1) Where can I turn to learn more about the appraisal impact of setting a mobile home on a permanent foundation? (i.e., Once a mobile home, always a mobile home?) 2) What is the appropriate appraisal report form to use? (i.e., 1004/2055 or 1073 or ?) and 3) Are there other concerns I need to explore?

Thanks for your insights!

 

[Pamela Crowley (Florida)]

Yes, once it's a HUD Code 'Manufactured' Home it always will be. If the foundations are installed according to FHA/HUD codes (drawn and certified as such by a licensed architech) and inspected by a FHA Compliance Inspector, I think that FHA financing would be available also.

I'm going to think about your questions some more and come back to this. I've heard of Co-Ops like this but, I'm not sure that I know of 'Condominiums' like this. I'm thinking there was there a thread a while back here or maybe on the old forum about something like this????

Interesting concept.

 

[Nancy in Friday Harbor]

Don,
First of all, your post is unclear about who your client is (not in appraisal terms, but the person who called you). Is this one of the HUD-Code manufactured home owners & he's talking about a single unit? Or is this the developer (you said "project") who will accomplish the conversion to condominium status?

If it's the latter, no form appraisal will handle this. Depending on the size of the project, are your qualifications/is your knowledge sufficient? Not meaning to be confrontational here -- just your question about "which form" and the unclarity of what your assignment would be raised some concerns.

Nancy

 

[Judy Whitehead (Florida)]

Don, I was the one who had the one where the mobile homes were converted to condominiums similar to this. It was the only one in this county, too. I was lucky and had three sales in the same complex. I used a 2055, primarily because of the additional condo pages and it actually suited my needs best. The one I had was complicated by the fact that it was ''voluntary'' to either convert to a condominium (and have a vote) or continue paying rent on the lot. Most of the ones I heard about were strictly condominium and you didn't have a choice.

You can price the manufactured homes out of Marshall and Swift (which is what I use) and it is pretty clear about the foundations, etc. As far as your questions go, yes, once a "manufactured" home, always one, although the value would usually increase with the additional foundation improvments. The only time I have seen a ''conversion'' was when the homeowner totally remodeled and asked the county to inspect and the county made the decision if it was considered a conventionally constructed home or a manufactured home. A conversion has to meet all of the current building codes for conventionally constructed homes.

Other than that, your other concerns would be the typical condominium questions, fees, what is included, etc. I would be realy worried about finding any other similar developments anywhere in the area (for comps), how those fees, amenities, etc. compare with the subject, but perhaps your contact can help you with that - he must have heard of it somewhere to get the idea!

 

[Ted Martin]

Please define permenant. Even site built homes don't have that feature. I think what your client is proposing is a site built concrete block foundation which may or maynot be engineered and may or may no be adequate.

 

[Don Ashbaugh]

Thanks for your input thus far! To provide some clarification, my client (the person who called me) is a mortgage lender who is working with the developer of the project. That is, my client hopes to gain the refinancing business from the current owners of the manufactured homes. The current owner of the park (i.e., the land) is the person who is converting it to a condo complex, thus owners will have to either convert or leave--though apparently the owners support the conversion and have been informed that they will need expert assistance in designing and installing the foundation (i.e., some cinder blocks, a couple of friends and a case of beer isn't sufficient!).