Refurbished mobile homes prove popular

Refurbished mobile homes prove popular

January 14th, 2011 by Ellis Smith in Businesstopstory

Staff Photo by Dan Henry/Chattanooga Times Free Press Green Acres, a mobile home community, has a handful of mobile homes for sale keeping on par with the trend of people purchasing used instead of new.

Staff Photo by Dan Henry/Chattanooga Times Free Press Green...

When Jack McDonald entered the mobile home business in 1970, the industry was at its peak. Hundreds of thousands of mobile homes were sold each year, with the market topping out at 579,960 sold in 1973, according to the Manufactured Housing Institute.

In the early days, McDonald developed land for several large-scale mobile home parks in Memphis, Knoxville and Chattanooga, including Green Acres, his last development just across the state line in Georgia.

McDonald's secret to success was requiring residents to abide by strict guidelines. By ensuring an orderly and safe mobile home park, he was able to keep his 247 lots full.

"We'd open new lots, and they'd be filled up right away," McDonald said.

But mobile home sales trended down until the housing crisis when, in 2009, only 49,789 mobile homes were sold. It was the fewest ever recorded by MHI, and a hardship for a man whose livelihood depends on residents occupying lots, he said.


Yearly U.S. manufactured housing shipments:

1960 - 104,000

1965 - 216,500

1970 - 401,190

1973 - 579,960 *

1975 - 212,690

1980 - 221,091

1985 - 283,489

1990 - 188,172

1995 - 339,601

2000 - 250,550

2005 - 146,744

2009 - 49,789 **

* -- Highest

** -- Lowest

Source: Manufactured housing Institute

In light of plummeting new mobile home sales and persistently empty sites, McDonald made decided to refurbish and sell used mobile homes onsite to fill his lots at Green Acres.

He found a surplus of used mobile homes available at cheap prices, so he began buying, renovating and placing them on available property lots at Green Acres.

"We buy them from inside and outside the park, set them down on empty lots, and put up a for sale sign," McDonald said. "Even if we don't make any money on the sale, it's all right because we make money on the land."

Residents pay between $193 and $216 per month to stay in Green Acres, or about $2,400 per year.

New mobile homes usually cost $40,000 and up, but Bill Terry and wife Paula, who supervise Green Acres for McDonald, are able to fix the units and sell them for $22,000 to $25,000, Bill Terry said.

"We make sure everything exterior-wise is in good condition, that all the outlets work and that the appliances in there work," Bill Terry said. "Sometimes you can take a loose panel off and straighten it and put it back, and seal around it with caulking."

From a double-wide that cost $60,000 brand new, to smaller mobile homes that have to be completely gutted, Bill Terry thinks his boss is onto a winning business strategy.

"They can get a used home for half or less the price of a new home, and they get excited about that," he said.

So far, he has sold two of the six restored homes, and if demand continues he'll proceed with restoration efforts on a seventh, Bill Terry said, up to a total of 25.

"It normally takes around two weeks to restore one," he said. "If it goes as we think it will, based on the experience we had, we will be continuing this effort."