Mobile Home Owner News – Mar 2021
Resident curated mobile home owners news and information for residents of Mobile Home Parks owned by Kort & Scott (KS) companies. The MHPHOA also provides news coverage for Mobile Home Parks not owned by KS companies.
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Fri, Mar 26, 2021 –
In a rush to get money out fast, a $10 million state aid program for struggling landlords gave money to two people who had been cited by regulators for bad rental operations and handed out too much money to other property managers.
The Arizona governor's Economic Recovery Management Team handled the landlord fund, which appears to have been run without the same oversight used for federally funded renter aid programs.
Another landlord, who received money for two trailer parks in Yuma, has a recent regulatory judgment against him in California for fraudulent practices in his mobile home operations.
Abraham Arrigotti received Arizona landlord grants awards totaling nearly about $7,320 from the fund for two Yuma mobile home parks. He has a recent regulatory judgment against him in California for his mobile home operations.
In April 2019, the California Department of Housing and Community Development and Yolo County reached a $175,000 settlement with Arrigotti on allegations of fraudulent practices while operating as a mobile home dealer.
Mon, Mar 8, 2021 –
The financial industry’s pursuit of profits from mobile-home communities is undermining one of the country’s largest sources of affordable housing.
In the past decade, as income inequality has risen, sophisticated investors have turned to mobile-home parks as a growing market. They see the parks as reliable sources of passive income – assets that generate steady returns and require little effort to maintain. Several of the world’s largest investment-services firms, such as the Blackstone Group, Apollo Global Management, and Stockbridge Capital Group, or the funds that they manage, have spent billions of dollars to buy mobile-home communities from independent owners. (A Blackstone spokesperson said, ‘We take great pride in operating our communities at the highest standard,’ adding that Blackstone offers ‘leading hardship programs to support residents through challenging times.’) Some of these firms are eligible for subsidized loans, through the government entities Fannie Mae and Freddie Mac. In 2013, the Carlyle Group, a private-equity firm that’s now worth two hundred and forty-six billion dollars, began buying mobile-home parks, first in Florida and later in California, focusing on areas where technology companies had pushed up the cost of living. In 2016, Brookfield Asset Management, a Toronto-based real-estate investment conglomerate, acquired a hundred and thirty-five communities in thirteen states.
Residents of such parks can buy their mobile homes, but often they must rent the land that their homes sit on, and in many states they are excluded from the basic legal protections that cover tenants in rented houses or apartments, such as mandatory notice periods for rent increases and evictions. One sign that a large investment firm has taken over a neighborhood is a dramatic spike in lot rent. Once a home is stationed on a lot, it is not always possible to move it; if it is possible, doing so can cost as much as ten thousand dollars. Most buyers aren’t eligible for fifteen- or thirty-year fixed-rate mortgages, so many of them finance their homes with high-interest ‘chattel loans,’ made against personal property. ‘The vulnerability of these residents is part of the business model,’ Sullivan said. ‘This is a captive class of tenant.’ A leader of an association for mobile-home owners in Washington State has compared life in a mobile-home park to ‘a feudal system.’
RE: Carson, California – Imperial Avalon Mobile Estates
Thu, Mar 4, 2021 –
Imperial Avalon Mobile Estates has more than 400 seniors who live on a fixed income but now have less than 12 months to relocate after real estate company Faring Capital bought the land to build a mixed-use development.
The decision to close the park was made shortly before the State Assembly Bill 2782 passed. The bill, also known as Mobile Home Rent Control, changes the Mobile Home Residency Law from giving homeowners at least 15 days’ written notice to 60 days, allowing rent control on leases that are more than one year long and more protections for residents.
Two months after the purchase, Faring Capital hired an appraiser to appraise each mobile home. Claire Condon Anderson, mobile home owner since 1983, expressed the insult she felt about the appraisal in a 2020 letter to the city.
To add insult to injury, he and his associate grossly undervalued my home at $37,000 when I have records of similar homes selling recently for $150,000 to $200,000 locally and some were even in this same park,” Condon Anderson said. “If this park must be closed, we want the fair market value for our homes and not just the value of a scrap pile.
RE: Long Beach, California – Friendly Village Mobile Home Park
Mon, Mar 1, 2021 –
Creating a new chapter in the complicated history of Friendly Village MHP Associates, L.P., Force 10 Partners served as court-appointed financial advisors to secure a stalking horse bid and purchaser of the property, resulting in an $11 million transaction.
To attract the highest bidder, Force 10 communicated with more than 200 potential purchasers/bidders and managed a complex due diligence process for the sale, which entailed financial, real property, engineering, and geotechnical material.
ACI Friendly Village, a newly formed California nonprofit public benefit corporation, won with a $11 million bid. ACI Friendly Village was created by Affordable Communities, Inc. and affiliated companies, which acquire and manage mobile home parks to preserve affordable housing. ACI’s principal, Maurice Priest, told the court that he intends to ‘manage, operate, and maintain the property, so that families can continue to live there and not lose the investment they have made in their homes.’
After tenants sued Friendly Village MHP, it filed for Chapter 7 bankruptcy protection in October 2018. A $56.4 million settlement in November 2019 resolved the lawsuit. Together with other proceeds, the sale will fund the settlement.