John Boll

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John Boll - in Ann Arbor. Review is on Page 5B. DETROIT...
in Ann Arbor. Review is on Page 5B. DETROIT FREE PRESS FEATURE PAGE ome owners look tor a place Mobile h to park 1 By DOROTHY WEDDELL Free Press Real Estate Writer There are 923 licensed mobile home parks in Michigan, able to accommodate more than 100,000 units. That means somewhere between 150,000 and 250,000 persons are now living in mobile home parks, according to Tim DeWitt, of the Michigan Mobile Home Institute. "And there's at least that many more people living in mobile units located on private property outstate," DeWitt says. But what these figures do not show is how many more there might be if only there were more mobile home park sites. Practically every park within 'the seven-county seven-county seven-county area surrounding Detroit is full, and has a waiting list. Vacancies when they do occur are practically fought over. "DEALERS WERE putting so much pressure on our individual park managers that our main office has finally taken over control of all sites," reports John A. Boll, president of Chateau Estates. The Chateau firm is the largest developer of mobile home parks in the local area, with 11 parks and some 6,000 sites either owned or managed under the Chateau Estates banner. In spite of its size, the company wrestles with the same problem as any would-be would-be would-be developer of mobile home parks the difficulty of getting zoning approval. Chateau has two more parks on the drawing board, but zoning approval on both is still pending. One of the proposed developments is an 800-site 800-site 800-site park which would be off Hall Road, east of Lakeside Shopping Mall in Clinton Township. The other, approximately the same size, would be built in Northville Township in the Six Mile and Ridge Road area. When might construction work begin on these parks? "Over the years during which we developed our 1 1 parks, our experience has been that roughly 75 percent had to go through a long approval process. We had hoped to have some sites ready by late spring, but there's no way of forecasting a time schedule at this point," Boll said. raljr m, J jp -yTi -yTi r;!'j jJj41V -jl -jl ' Many mobile homes, such as this one by Fleetwood Enterprises, are more accurately defined as "manufactured homes" When a home is riot a house. . . Other developers, too, are awaiting approvals for proposed proposed parks. RUDGATE EAST is in the final approval pipeline, and will be a 430-site 430-site 430-site park at Twenty-Six Twenty-Six Twenty-Six Mile and M-53 M-53 M-53 in Washington Township. According to an Elro Development spokesman, 130 of the sites will accommodate doubie-wide doubie-wide doubie-wide units and the park should be ready for its first mobile units sometime in June. This developer also built and operates Rudgate, a 900-site 900-site 900-site park on Eighteen Mile near Mound in Sterling Heights. In Chesterfield Township, at 1-94 1-94 1-94 and Cotton Road, approval for a 361 -site -site park is being sought as a joint venture development of Aldo Marroco and Champion Home Communities Communities a subsidiary of the Dryden, Mich.-based Mich.-based Mich.-based mobile home manufacturer. About a mile away, another 125 sites should be available about mid-March mid-March mid-March in Carriage Way, on Twenty-Four Twenty-Four Twenty-Four Mile between Gratiot and the Ford Freeway. James, James Jr. and Chuck Babcock head the investor group that is developing this park which now has 205 sites nearly occupied and will eventually contain nearly 800 sites. THAT'S ABOUT ALL that's in the pipeline east of Detroit. West, however, there is Wagon Wheel South on Michigan Michigan Avenue near Mott about three miles west of Ypsilanti. This is an extension of the 11-year-old 11-year-old 11-year-old 11-year-old 11-year-old Wagon Wheel Park whose 230 sites are full. The new section will have 147 sites all capable of accommodating double-wide double-wide double-wide units. Lots measure 55-by-91-feet, 55-by-91-feet, 55-by-91-feet, 55-by-91-feet, 55-by-91-feet, 55-by-91-feet, 55-by-91-feet, at a basic monthly rent of iou. A park spokesperson said that sites are being rented now ior December occupancy. It is this general shortage of available sites that has created unhappy situations in some existing parks. "There's no doubt that some park owners are taking advantage of the tight supply and the swelling demand,' says John biebel, of Champion Home Communities. "So long as developers can't get zoning approval, the supply situation isn't going to be relieved even though Doin mooiie nome manufacturers and mobile park develop' ers see gigantic opportunities ahead as the cost of convex tional homes continues to spiral," says DeWitt of the Mobile Home institute. The Chateau Estates president, John Boll, is more opti mistic. "Rents in our parks currently range from $90 to $155 per montft, with $13U-$135 $13U-$135 $13U-$135 the typical charge. The rent in creases that we've been able to implement over the past three years have now made developing new parks an economic teasibility again," Boll says. Mobile home park operators were caught in much the same situation as apartment developers for a few years. There was an oversupply of park sites (as there was a glut of new apartments) at the same time that inflation hit operat ing costs. Competition for tenants forced them all to post pone rent increases. A mobile home is not a home as far as most lending institutions are concerned. Clinging to the old "tin trailer" line of thinking, lenders still lump mobile homes in with automobiles, handled by a department labeled "consumer". or "installment" loans. Typical interest rates today in the Detroit area range from 10 to 12 percent, but these numbers by themselves are misleading. The structure of interest rates on mobile home loans is called by several terms with "add-on" "add-on" "add-on" being the most common. Other terms are "pre-computed" "pre-computed" "pre-computed" and "discount." "discount." For example: A $12,000 loan at an add-on add-on add-on interest rate of 10 percent for a period of 12 years would cost $14,400 in interest. That means the total note would amount to $26,400 requiring 144 monthly payments of $183.33. If you want to compute the cost yourself,-the yourself,-the yourself,-the formula is: Amount borrowed multiplied by the interest rate, then multiplied again by the number of years. In the example above, the calculation woud be $1 2,000 times 1 0 times 12. In other words, the annual percentage rate of add-on add-on add-on is significantly higher than it would seem to be when quoted, (The Truth-in-Lending Truth-in-Lending Truth-in-Lending Truth-in-Lending Truth-in-Lending law makes it compulsory for lender to show borrowers, in writing, exactly how much they will be paying in interest charges.) lli THE LOCAL AREA, most lenders raised their interest rates on mobile home loans last month. First Federal Savings of Detroit, for example, went from eight to 10 percent and tightened credit requirements somewhat, according to Rick Knight, assistant vice-president vice-president vice-president of the consumer loan department. department. "We still have money available for mobile home loans, although we're being a bit stricter about qualifying borrowers. borrowers. For example, a borrower must have a solid employment record for no less than one year," Knight said. First Federal's 1 0 percent add-on add-on add-on interest works out to an on the house Hubert J. Brass Personal labor on real property is not deductible Qln 1977 my brother and I spent many hours fixing up a rental house we bought as an investment. On our income tax returns we each deducted 100 hours of labor at $5 per hour as repair expense. The IRS rejected this deduction. Should we appeal? Lorrie M. It would be a waste of time. The value of personal labor on real property is not tax deductible. For this reason, it usually pays to hire work done on investment property since the work usually gets done faster and the cost is tax deductible. For details, talk to your tax advisor. QMy father will retire next year when he will be selling his home. The only Income he, my mother, and my sister will have Is his social security benefit, plus some savings. He wants to rent an apartment, but I think he should buy a condominium. What do you recommend? Linda R. Buy a condominium or small house. Retired renters will continue to be the victims of inflation as rents and living costs continue upwards. Owning a residence means your parents should continue building equity as market value appreciates, but renters have no such advantage. Due to your father's precarious dependence on social security, he'll need all the help he can get. Readers may write Robert J. Brass at Box 828, Detroit 431. . annual percentage rate of 1 5.86 percent. On a typical loan of $10,000 over a 10-year 10-year 10-year term, monthly payments would amount to $166.66. Some mobile home dealers have established their own financing programs with lenders. Global Mobile Homes, for example, has. arranged a financing package through Bank of the Commonwealth which carries a 9'2 percent add-on add-on add-on rate amounting to an annual percentage rate of 14.23 percent. "That's less expensive than some of today's conventional home mortgages," explained Patrick J. Robinson, chairman of the board of the company whose 21 Detroit-area Detroit-area Detroit-area sales offices sold more than 1,000 mobile homes last year. "The prices of the mobile units we sell run a bit higher than the average, because we've upgraded our product to deal specifically with today's increased energy costs," Robinson said. Global sells only Fairmont-manufactured Fairmont-manufactured Fairmont-manufactured homes, built to the company's specifications. These include a three-point three-point three-point energy-saving energy-saving energy-saving package: Units are sheathed in Monsanto foam to eliminate wind infiltration, have sidewalls and ceilings insulated with 3l2 and 6-inches 6-inches 6-inches of Owens Corning fiberglass and are equipped with an ungraded Coleman furnace that can be adapted for use with a heat pump. In addition to the energy-saving energy-saving energy-saving package, Global also provides a five-year five-year five-year service contract that is transferable if the home is resold. Purchase prices also include all the equipment and service involved in setting-up setting-up setting-up a mobile unit tie-downs, tie-downs, tie-downs, skirting, steps with railings, patio awnings and posts. "A typical purchase is a two-bedroom, two-bedroom, two-bedroom, 14-by-70-foot 14-by-70-foot 14-by-70-foot 14-by-70-foot 14-by-70-foot 14-by-70-foot 14-by-70-foot unit," Robinson said. He gave this example of the cost breakdown: The mobile home is priced at $18,000. With sales tax, the price would be $18,720. The buyer would pay 20 percent down plus fees, or $3,744. At 92 percent add-on, add-on, add-on, over a 15-year 15-year 15-year period, monthly payments would amount to $202.09. If the unit were located in a mobile home park, the monthly rent would, of course, be extra. A typical rent in the local area today is $130. THERE ARE SOME unpleasant truths associated with mobile home financing. For example, while both FHA and VA have loan programs, dealers must pay 'points' that today typically amount to $1,000. These costs, of course, are hidden in the price so that the buyer ends up paying more than necessary for the unit. Even commercial banks and savings and loans which write mobile home loans generally pay the sales dealers a "service" fee. Technically, this is not a kick-back kick-back kick-back but a fee for making the dealer responsible in case of repossession. Repossession is an ugly fact that continues to haunt the mobile home picture. Not everybody has such problems. Pat Robinson said Global Homes had only three in the last two years. Rick Knight at First Federal reported a fractional percentage in recent years. But Robert J. Schlaff, senior vice-president vice-president vice-president of the manufactured manufactured housing division of Advance MortgageCiticorp, said that repossessions "typically run 1 1 to 12 percent in this area." Schlaf f 's company does not deal directly with consumers, but 'buys' mobile home loans from dealers and then handles the payment servicing. "The sad fact is, that many of today's repros are so unnecessary, Schlaff said. "People get financially strapped and thinking that their mobile home isn't worth anything to them simply walk away. Sometimes, they even mail in their keys instead of their payments. What they don't realize is that, for several years now, mobile homes have been appreciating in value. Chances are, they could sell the home not only for more than they owe but for more than they paid. At the very worst, they coud break even, pay off .their loan, and keep their credit record clean," Schlaff said. Dorothy WcJdeil 1.wimnimmiuiniMm''nniimiwi"ii lU , 1 , -ph. -ph. m m ' f i j"' ' Today's mobile homes can be built with or without permanent foundations. ISOW, THEY'RE NOT SO MOBILE They used to be travel trailers Today's mobile home isn't very. Its only trip is likely to be the one from the factory to its intended site. In the 1930s, mobile homes were just that travel trailers. They were lightweight, highly portable units generally generally made of thin metal that could easily be pulled behind cars of that era. ,,- ,,- Jf -WKtilt.jW"'" -WKtilt.jW"'" .Ilk " ' 8 , , Mobile homes have come a long way from the original six-foot-wide six-foot-wide six-foot-wide six-foot-wide six-foot-wide trailers. A 1 Mobile homes were very popular among itinerant workers workers such as road construction crews, or traveling circuses and carnivals. Life was simpler when they took their homes with them. The big move to mobile homes occurred during World War II, when they were widely used as year-round year-round year-round housing for the defense plant workers who poured into newly-located newly-located newly-located factories in towns with no available housing. By 1943, the National Housing Agency had purchased an estimated 35,000 mobile homes for workers and their families. Growth of the mobile home industry continued during the late 1940s and early 1950s. There was no supply of housing for the thousands of returning veterans and their soon-expanding soon-expanding soon-expanding families. The cost of a mobile home was low. Heating was economical. Upkeep was a snap. And rents in "trailer parks or courts" were reasonable. Over the years, mobile homes have evolved much as conventional housing has changed from the l'j-story, l'j-story, l'j-story, asbestos-sided asbestos-sided asbestos-sided bungalows that were stamped out by the thousands. Mobile homes have become larger, more luxurious. Today's double-wide double-wide double-wide units and multi-sectional multi-sectional multi-sectional mobile homes can offer more than 2,000 square feet of living area. They may come equipped with wood-burning wood-burning wood-burning fireplaces, wet bars, Roman bath tubs, elaborate kitchens, beamed ceilings and shake roofs. The manufactured housing institute defines a mobile home as a structure which can be transported in one or more sections, and is eight body-feet body-feet body-feet or more in width and 32 body-feet body-feet body-feet or more in length. It is built on a chassis and is designed to be used as a dwelling with or without a permanent foundation. The mobile home unit contains all plumbing, heating and electrical systems as an integrated part of its construction. A multi-sectional multi-sectional multi-sectional home consists of two or more sections which are attached at the home site. An expandable mobile home is one with a room or rooms which fold, retract or telescope into the main home structure when bping transported transported then expand out once the home is on site. A mobile home is towed not driven. Today's mobile homes are more accurately described as "manufactured homes." Dorothy Weddell

Clipped from Detroit Free Press01 Dec 1979, SatmetroPage 15

Detroit Free Press (Detroit, Michigan)01 Dec 1979, SatmetroPage 15
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