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BUYER TO TACKLE TOUGH RENT CONTROL
The mobile home park for
sale in the city of Carson (Los Angeles County) California sold on May 21, 2002. John Grant of Park
Brokerage Inc. and Vince Reynolds of MHRV Advisors represented the buyer and the seller in the sale.
The all ages community was built in 1974 and has 86 sites. It is a high quality, four star community with all
doublewide homes, clubhouse, pool, spa, RV storage, laundry, and gated entry. The park is situated on 10.2
acres. The community is serviced by city water and sewer systems. The community was in very good
condition at time of sale.
The site rents were very low at $244-286 per month and included the sewer, water, and trash utilities. The
market site rent is approximately $500 per month with the resident paying all the utilities. The community
has not had a vacancy since it was originally filled. The mobile home community is subject to the very
onerous City of Carson rent control ordinance, which strictly limits rent increases.
The community sold for $2,150,000 or a 7.7% capitalization rate. The price per site was $25,000.
Washington Mutual Bank provided new mobile home park financing of $1,460,000 at an initial one month Libor
adjustable interest rate of 4.6%.
John Grant commented, “Vista del Loma is the high quality, doublewide, infill community that most investors
desire. However, the City of Carson rent control ordinance might be the worst in California. You are
not allowed an annual, permissive rent increase each year, but instead must make a very labor and paper intensive
application to the City documenting your every receipt and invoice. The rent increase process is very
political and is controlled by the city officials (that the manufactured housing community residents
control/elect). Typically very limited (if any) rent increases are given. In addition the rent control
ordinance does not allow any vacancy decontrol”.
Vince Reynolds added, “Vista del Loma has not had a rent increase since 1997 and only two rent increases since it
was built. The buyer specializes in owning manufactured housing communities in rent-controlled cities and
working with the difficult rent increase applications. He understands the rent increase process is long,
arduous, and expensive. However, the sales price at $25,000 per site was very attractive, and the site rents
are only half of what they should be. The property offers significant upside if the rents can be increased or
if vacancy decontrol is ever enacted”.
Mobile Home Parks For Sale in CA, Los Angeles County,
Carson
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