ROC Northwest partners with owners to sell their MHP investment. Once under contract ROC Northwest supports the residents to incorporate as a limited equity housing cooperative with the sole purpose of purchasing their community. At the closing table the resident entity buys the park with financing from dedicated funders. After closing ROC Northwest provides technical assistance to the housing cooperative for a minimum of ten years, assisting them with the task of launching their small business and the management of the community. There are more than 20 resident owned communities in our service territory.
Frequently Asked Question
What’s the purchase price?
- The short answer is fair market value. The long answer is that a lot of factors go into the purchase price including the operating history, lot rent, and infrastructure on the property.
- The purchase price is negotiated by ROC Northwest before the residents are notified of the sale and opportunity.
What’s your close rate?
- 100% of communities that have accepted assignment have closed. Since 2008, only one community did not accept assignment of the P&S. This is one of the first actions the residents take and is known within the first few weeks of the contract.
- Other risk factors such as financing and concerns that arise during due diligence are mitigated through pre-approval and accurate seller disclosure prior to contracting.
What’s the timeline?
- The P&S is written with the goal to close in roughly 90 days.
- However we know that something will inevitably come up to cause a slight delay. It’s reasonable to expect closing to happen between 100-150 days from contract execution.
How is this financed?
- Resident owned communities are financed through several lenders at over 100% the purchase price. Most of the communities are financed through ROC Capital, a CDFI dedicated to supporting residents. Other lenders include WCRA and Washington State Housing Finance Commission. There is also WA Capital Budget grant funding available.
- Individual residents are not asked to put any equity into the purchase.
Who owns the park?
- The simple answer is the resident housing cooperative.
- Residents are given the opportunity to join the cooperative as voting members. Membership gives them the ability to serve on the Board of Directors, vote on governing documents and the annual budget. Membership typically costs $100-$150 for a lifetime membership.
Does my park fit the model?
- Resident owned communities are most successful with a minimum of 25 lots. This can be a combination of MH and RV, with a majority being MH.
- It is understood that there may be infrastructure issues, parcel boundary concerns, large receivables, etc. These can be discussed during contract negotiation.
- Negotiate Price Using a revenue-based valuation, we are able to negotiate a price that works for both the Seller and the Residents.
- Sign Purchase And Sale Agreement After settling on a price, we execute an assignable, commercial Purchase and Sale agreement between the Seller and the Northwest Cooperative Development Center of which ROC Northwest is a program.
- Offer PSA To Residents With PSA in hand, we call a meeting of the residents where they discuss the purchase, consider the costs and benefits, form a legal corporation, and ultimately decide whether to take assignment of the PSA.
- Due Diligence And Financing The ROC Northwest team works with the new corporation to ensure a clear title, appraise the property, conduct a property condition report, and secure funding commitments.
- Close Residents approve financing, sign closing documents, and have the organizational structures in place to hit the ground running on day one after closing.