Remember when condominiums were all the rage, as new high-rises sprouted like mushrooms, and apartments were converted faster than three-minute rice?
Well, if Robert Holland has his way, the next housing craze will be " mobile miniums."
But unlike condo projects, which appealed primarily to younger buyers craving for the laid-back California life style, mobileminiums appeal to a much older crowd--folks in their 60s and 70s who already live in mobile-home parks but lease their space instead of owning it.
Holland's company, Park Homes Inc., purchased the 457-lot Lawrence Welk Mobile Home Park in Escondido's Lawrence Welk Village for nearly $20 million last May. He renamed the park Champagne Village, and soon began selling individual lots to people in the development who already own their home but are leasing the ground under it.
So far, Holland says, about 343 of the 457 lots "have already been spoken for" by people who plunked down a $100 deposit to reserve their right to buy their own lot. Another 70 or so of the families have said they'd rather sign a lifetime lease for their lot, which could be assumed by a future tenant or passed on to the current tenant's heirs.
Although most of those people aren't yet legally required to go through with the deal--the deposit is refundable until next month--Holland reckons most or all of the folks will eventually sign on the dotted line.
Champagne Village is the second so-called "mobileminium conversion project" Holland has undertaken, and is believed to be only the third developer-executed conversion of a park to individual ownership.
Last year, Holland successfully converted the nearby Rancho Monserate Country Club park, selling most of the lots at prices ranging from $36,900 to $59,900.
But Lawrence Welk Village isn't just another retirement community. The bandleader's company, Teleklew Productions Inc., began developing the resort 22 years ago.
Booked Months in Advance
In addition to the mobile homes, the 800-acre project includes a 96-room hotel, time-share resort condominiums, several small shops and a Scripps Clinic satellite facility.
About 500,000 visitors come to the resort each year to golf, play tennis, and have their pictures snapped next to a life-size bronze statue of the famed television bandleader. Rooms at the hotel are booked months in advance, and people sometimes form long lines to glimpse the seven-foot tall champagne glass that appeared on Welk's 25th anniversary show.
Although the term "mobile homes" often conjures images of box-like trailers with paint flaking off their sides, the renamed Champagne Village definitely isn't the low-rent district.
Many of the seniors living there shelled out more than $100,000 just for their home, Holland said. His firm is selling the lots under those houses for an average of $52,000, with some selling for as little as $36,900 and others going for as much as $64,900.
Better Quality Homes
Holland got his start in the conversion business in Washington state in 1970. He eventually converted nine apartment buildings into condos and then moved to California in 1983 with the express intent of converting for-rent mobile-home parks into mobileminiums.
"The quality of mobile homes here is better than in most other states," Holland says. "In Washington, Texas and Arizona, mobile homes look like mobile homes--like somebody parked them on a lot, and might come to get them any day.
"In California, mobile homes aren't really mobile--they tend to look more like conventional houses. That makes conversion more feasible."
Some people decided to buy their lot instead of leasing it because they can finance it just like a home and can reap important tax deductions, Holland said. Others hope the property's value will rise, while still others simply like owning their own piece of terra firma.
The 70 or so homeowners who Holland figures will sign leases initially, will pay an average $295 a month rent for the use of the lot. The contract also calls for rents to rise an automatic 7% a year.
All of the park's households--whether they lease or own their lots--will also pay $130 a month in homeowners' fees on top of their rent or mortgage payments.
How much does Holland figure he'll make on this deal? About $2,500 to $3,000 for every lot that's purchased. If the 343 families who've already said they plan on buying their space actually go through with the transaction, his profit would range from $857,500 to about $1.03 million.
Values Expected to Rise
Holland also points out that he'll collect monthly rent from people who stay but don't buy. Property values will likely rise while the tenants still occupy the space, which means he should be able to sell those lots for even bigger profits after the renter eventually moves out.
His company also has sold 15 of the homes in the park, collecting a 3% commission in each transaction.
Meanwhile, Holland says his early success has drawn the attention of other groups in different states who are willing to pay him for his help in carrying out their own conversion projects.