A new model of mobile home park ownership has emerged in North Carolina.
Vecinos Unidos, a resident group at the Mark Park in Burnsville, North Carolina, has organized and successfully purchased its mobile home park through a nonprofit land trust model.
CRA-NC worked with the residents and the Center for Participatory Change, an Asheville non-profit, to bring about the new arrangement. The 14 unit park, on 7 acres of land in the North Carolina mountains, was sold for approximately $300,000. CRA-NC provided some equity. BB&T stepped in for a two-year loan.
This kind of purchase has a lot of significance because it could potentially pave the way for more revitalization in North Carolina's land-lease parks. There are more than 4,000 parks in North Carolina. They house a large portion of the state's population.
For years, mobile home parks had a dichotomous financial status. To residents, they usually represented a money-losing proposition. At the same time, owning a park was one of the secret pathways to wealth in many parts of the state.
Parks routinely sold for six or eight times their cash flows. If a person could manage to buy a few acres, set up some homes and attract tenants, there was a good possibility of a steady return. Nowadays, many parks in the states are selling at a multiple of just three times cash flows.
Vecinos Unidos will be the first non-profit owned park. The board consists of representatives from within the park, plus several local businessmen, a representative of a local church, and a few nonprofits.
A nonprofit ownership structure brings with it a few distinct advantages, at least in the context of North Carolina. For one, many lenders are familiar with working through nonprofits on other community development projects. The degree of community organization is less than would be for a truly resident-managed cooperative. As well, many aspects of the privately owned land-lease park carry well into the nonprofit owned park. A non-profit owned park is essentially a land trust.
The goals of the park will include keeping rents affordable and to return surplus cash back into the maintenance of the community. As well, it would be great to look into developing some of the 6 undeveloped acres on the top of the lot. The park owns two of the units and both could be replaced.