A GREAT RENTAL MARKET OVERSHADOWS TOUGH RENT CONTROLS

The sale of the Westwinds Mobile Home Park at 1411-15 Pine Street was completed July 26, 2000 for $2.0 million. Vince Reynolds of MHRV Advisors and John Grant of Park Brokerage Inc. represented both parties in the transaction.

The all ages community consists of 66 spaces, a 3-bedroom/2-bath house, 2-bedroom/1-bath apartment, and 34 older, rental mobile homes. The park is located on 4.53 acres and contains mostly singlewide mobile homes. Amenities include a recreation room, pool, and laundry. The park was built in 1957 with a second phase added in 1961. The community was in fair (tired) condition at the time of sale.

Space rents are $215.68 plus utilities in a $375 market. The mobile homes rent for $375-$725, the apartment for $575, and the house for $1,200. The space rents are subject to the City of Escondido rent control ordinance with a permissive annual increase at 75% of cpi. The rent control ordinance does allow full vacancy decontrol.

The property sold at a 10% capitalization rate. A local bank provided new financing of $1,477,500 at an adjustable interest rate at the 11th District + 3% (current rate 8½%). The loan term was 30 years.

John Grant commented, "The buyer owns the 129 space mobile home park adjacent on the south side of property, and a third mobile home park in the City of Escondido. He knows Escondido has an onerous mobile home park rent control ordinance, but feels he can increase the income and the quality of the park with new manufactured homes in place of the 34 rentals".

Reynolds added, "The housing market in Escondido is very strong with home prices starting at $200,000 and two bedroom apartment rents at $750 with almost no vacancy. Local dealers have enjoyed strong demand for new manufactured homes in the manufactured housing communities. The buyer should be very successful in replacing the old rental mobile homes with new manufactured homes.

Vince Reynolds sells and finances mobile home and RV parks exclusively throughout the states of California, Arizona and Nevada. Vince has sold 60 RV and mobile home parks in the past 8 years with dozens of others financed. For further information please contact Vince at (866) 459-MHRV 6478.