Project Details
Blank Family Communities identified the best way to add immediate value to a low occupancy community was to bring in 27 new manufactured homes and occupying them with renters.
The Challenges
Low Occupancy
The 121-site community had 31 existing rent producing sites (25.6%) and was not bringing in enough revenue and a fast return was needed for the owners to get their desired return.
The Solutions
New Home Infill
We decided with the ownership group that the best course of action was to bring in 27 brand-new homes and occupy them with rentals. This would dramatically increase the revenue quickly, as we were able to rent 10 homes to qualified renters per month. Given the midwestern market we were in, we decided that selling the homes upfront would take too long (projected absorption was 1-2 homes per month) and the owners did not want to set up chattel financing.
We were able to set up very attractive home financing for the homes themselves, which gave the community full site rent + a nice return on home rent. They were since able to obtain better financing for the community, due to the increase in occupancy.
The Conclusions
Stabilized Community and Higher Value
After successfully occupying all of the homes, the community dramatically increased its revenue and overall value. The community is now being sold at a much higher price point and has attracted an institutional level buyer, who is going to continue the infill process based on our proof of concept.
