Rent hikes at Candlewood part of national trend as investors purchase mobile home parks nationwide

Note: This article has been updated. Originally, we quoted a 2016 Amendment to the Mobile Home Act that looked to change the first right of refusal clause in many mobile home land leases. That measure failed. The language regarding the sale of a mobile home according to the Act is now included. Candlewood residents currently do not have a lease from Kodiak Property Management.

By Dani Tietz

No matter what income bracket an individual falls in, access to affordable housing is paramount. 

For the wealthy with disposable income, renting or purchasing a home can be fairly stress-free. But as the landscape of real estate changes nationwide to conglomerates owning homes, apartment buildings and even mobile home parks, housing options for the middle- and lower-income class Americans are becoming scarce and even unaffordable.

Living in a mobile home is the only affordable option for millions of Americans. 

In Mahomet, where the median home price is $239,700, according to the 2020 Census, affordable housing options are particularly limited. While more multi-family living options are being developed in Mahomet, most new options range from $1,200 to $2,000 per month. Even older properties that were once $600 to $700 per month have increased to $800 to $1,000 per month. 

In 2021, lot rent at Mahomet’s Candlewood Estates was $290 per month. Today it is $340, and by April 2023, it will be $525 per month. 

Residents in Candlewood have one of two options: they can rent a home from the owner (in this case Kodiak Property Management) alongside paying rent for the land the home sits on or they can rent the land from the owner and put a home they own on the property. Every month, everyone in Candlewood pays rent for either one component or both. 

As one of the biggest residential developments in the Mahomet area, with around 600 lots for mobile homes on 108 acres, it’s also one of Mahomet’s oldest neighborhoods. For more than 50 years, the property was owned and managed by Candlewood Estates, a business run by Olen “Bud” Parkhill. That changed in September, 2022 when Parkhill sold the land for over $15.6 million. 

For Candlewood residents, who receive communication from the property owners or pay their land/home rent, it appears that  Kodiak Property Management purchased the property from Parkhill. The platform they log into in order to pay rent is Kodiak and the line item for the fee on their bank statement is “ Kodiak Property web pmts.”

But Kodiak Property Management is only one of four entities involved in the purchase. The actual owners of the property are Crown Communities and Candlewood MHC, owned by Alexander Cabot and Heath Biddlecome, of California. Park Homes Sales is also owned by the same entities, and serves as the organization that acts as the broker for home sales should a homeowner in Candlewood choose to use their services. 

This model is used nationwide as investors like Cabot and Biddlecome buy up mobile home parks across the country. 

In an interview with NPR, George McCarthy, president of the nonprofit Lincoln Institute of Land Policy, said when investors purchase mobile home parks they increase rent “sometimes 20-, sometimes 50-, sometimes 70-percent.”

The 2021 interview highlighted how once investors raise rates and fees in a park, its value increases. With loans backed by the U.S. government with cheap interest rates, the investors will borrow against the property, using the loan to purchase another mobile home park. 

“And what’s ironic about it is that one of the missions of Fannie Mae and Freddie Mac is to help preserve affordable housing. And they’re doing exactly the opposite by helping investors come in and make the most affordable housing in the United States less affordable all the time,” McCarthy told NPR. 

Crown Homes/Kodiak Property Management own 18 mobile home parks. Besides Illinois they are also based in Indiana, Iowa, Pennsylvania, Massachusetts, Kentucky and Ohio. Alongside their most recent purchase of Candlewood Estates, Crown Communities recently won a case against the Pocasset Park Association, a group of homeowners looking to purchase the mobile home park they live in as a way to maintain local ownership. 

Josh Weiss from the firm 10 to 1 Public Relations said that while the rent increase may be similar, Crown Communities looks at Candlewood as its “flagship” community. 

Weiss said that while the rent increase is significant, the money will go back into Candlewood for improvements, although he was reluctant to specify what those improvements would be and when residents could expect to see them. 

In an email, Weiss wrote on behalf of Kodiak Properties, “With the funds, we are committed to many community improvements and upgrades, such as roadwork, landscaping, and repairs and improvements to community amenities. All of this will help to improve curb appeal, increase safety, and will ultimately directly benefit property values. We are eager and excited for residents to see the reinvestment we are making in the community they are proud to call home.”

Some Candlewood residents who own their home are already listing their property for sale while some others are talking about uprooting their families and moving from the subdivision they call home to a more affordable location. 

Another option for mobile home owners is to move their home from one location to another where lot rent could be less expensive. The move is costly, though. It costs from $5,000 to $10,000 to move a mobile home, if the home is even movable. 

Weiss also signaled that new homes would be added to vacant lots as early as May, 2023. He added, “There are no plans to place new homes or replace current ones on currently occupied lots.”

Kodiak Property Management lists available homes through its website portal. Homes in other communities are listed for $80,000 to $120,000 while those in Candlewood are listed for $75,000. 

Some Candlewood residents have been approached by Kodiak Property Management with “interested buyers” to purchase their home for significantly less than its value. Some have also been given paperwork that would allow Park Home Sales (also Kodiak/Crown Communities) to act as the negotiator for the seller, giving them the exclusive right to advertise and market the home. The agreement also allows them to accept an offer on the home, seemingly without any input from the homeowner on the value of the offer. 

Should the home sell, Park Home Sales/Kodiak Property Management/Crown Communities would take 10 percent. Should the owner decide not to sell the home within the duration of the contract, they would be required to pay Park Home Sales, LLC. 1.5 percent of the last quoted sale price. 

Weiss stated in an email interview, “Park Home Sales has the first right of refusal if a homeowner wishes to sell their home to a new buyer to move it out of the community. The purchase option is to match the sales price. There is one instance where Park Home Sales did purchase a home before it was sold and moved off-site.

“While Park Home Sales may make similar purchases in the future before a home is sold and moved off the property, it has no purchases currently in the works.”

The Mobile Home Landlord and Tenant Rights Act (765 ILCS 745/24)reads:

"Sec. 24. Sale of Mobile Home. The park owner shall be enjoined and restrained from prohibiting, limiting, restricting, obstructing or in any manner interfering with the freedom of any mobile home owner to:
(a) Sell his mobile home to a purchaser of his choice, provided that the park owner shall be allowed to promulgate any general qualifications or lawful restrictions on park residents which limit or define the admission of entrants to the park. The purchaser, prior to closing, must obtain a written and signed lease;
(b) Employ or secure the services of an independent salesperson in connection with the sale of said mobile home, providing that said salesperson collects and remits all governmental taxes.
The park owner is prohibited from imposing any fee, charge or commission for the sale of a mobile home, except when a mobile home owner requests the park owner or his agent to assist in securing a purchaser for his mobile home. A commission may be accepted for such service subject only to the following conditions:
(1) That the exact amount of commission or fee shall be a percentage of the actual sales price of the mobile home; and
(2) That the maximum percentage figure for the services in the resale of the mobile home by park owner or his agent shall be set forth in writing prior to the sale.
The park owner is prohibited from requiring, upon the sale by a tenant of a mobile home to a qualified purchaser, the removal from the park of such mobile home unless the mobile home is less than 12 feet wide or is significantly deteriorated and in substantial disrepair, in which case the park owner shall bear the burden of demonstrating such fact and must, prior to sale, have given the tenant written notice thereof, and that unless first corrected, removal will be required upon sale.
(Source: P.A. 85-998.)

Candlewood residents had been under a boil order for 10 days in January. While that order has been lifted, some are still experiencing yellow- and brown-colored water or limited access to water.  Additionally, Candlewood residents currently do not have a lease from Kodiak Property Management.

Weiss said that Crown Communities is not a predatory company that is just looking to come in and “flip” Candlewood. 

“There’s no reason you should automatically trust me and I totally respect that,” he said. “I understand that you can’t just take my word for it.

“I can tell you that straight out, they want Candlewood to become their flagship property. It’s the largest one they purchased. They really want to invest in it, really want to make it a wonderful place to be. Their intent is not to turn around and flip.”

A Look at Crown Communities, LLC.

The way Crown Communities registers its business is also a common practice for large corporations. 

A 2011 Reuters article features Crown Communities’ registered business location as1712 Pioneer Ave. in Cheyenne, Wyoming, in an article about shell corporations. 

The Reuters article focuses on Wyoming Corporate Services, which Weiss said is another entity used by Crown Communities. The article asserts that Wyoming Corporate Services is a business-incorporation specialist that “can be used as ‘shell’ companies, paper entities able to hide assets.”

Wyoming, Delaware and Nevada, all allow businesses to register within their state in ways that are often referred to as shell corporations..

The 1712 Pioneer Ave. address is not just Crown Communities’ address. Many corporations throughout the United States use it as their registered address through a $99/month membership with Opus VO, a virtual office that offers a live receptionist to answer calls, take messages and transfer calls for businesses. Businesses who hire Opus VO also get a corporate mailing address, phone number, fax number. 

When researching the physical addresses for all four companies — Crown Communities, Kodiak Property Management, Candlewood MHC and Park Home Sales — all of their addresses are 1712 Pioneer Ave., in Cheyenne. All four companies can also be tied to Incorp Services, which is another registered agent service. 

While Weiss said Cabot and Biddlecome are partners within each of the four business, among others, Cabot is usually the only name on each state’s LLC paperwork,when the paperwork lists individuals..When agents are used, the registered agents, in this case Incorp, LLC., oftentimes lists other names to keep the real owner’s identity hidden.

This is the case with Park Home Sales, in Wyoming. A search through old LLC incorporation information in Wyoming, led to Madmartigan Ventures registered in 2015 and 2016, which is now known as Park Home Sales. However, in Illinois, the business is listed under Crown Home Sales, LLC.

Prior to Weiss saying Cabot and Biddlecome were partners, and during the week of not understanding the breadth of the Crown Communities organization, speculation about the connection between companies arose as it was evident the four entities were linked in Illinois, but not as clear on how they were structured in California, which is where the P.O. box for Crown Communities and Candlewood MHC is registered.

The first search for Crown Communities in California, led to Heath Biddlecome. Crown Communities LLC in California is not in good standing after federal regulators charged Biddlecome, a managing partner at Crown, in 2009 with cheating investors who contributed about $10 million to a fund intended to invest in mobile home parks.

A judge for the Southern District of California’s U.S. District Court ordered Biddlecome to pay $141,818 damages to the investors of the fund he established with the investors in May, 2011. The judge also determined that Biddlecome was subject to a $65,000 civil fine for those actions.

In addition, The U.S. Securities and Exchange Commission prohibited Biddlecome from dealing stocks. Biddlecome was allowed to reapply for association after three years.

Further research attempting to better define Crown Communities shows that the Linkedin page for Crown Communities, states that “Crown Communities is an investment firm that acquires and preserves manufactured housing communities throughout the United States. We actively manage our portfolio properties to the highest standards and with the goal of maintaining safe, clean and welcoming communities for our tenants as well as creating stable, long-term income for our principals and investors.”

When pressed for the connection between these companies, Weiss said Kodiak Property Management in California, is the company’s registered agent there, not Candlewood MHC. Weiss asserts that Candlewood MHC, which is owned by Comfort Capital, is a different mobile home investment firm and that Crown Communities has no affiliation with the Candlewood MHC registered in California. 

All of this information is confusing. Maybe it’s supposed to be. 

Yet, the outcomes for their renters are relatively simple.  These companies utilize a business model that results in thousands of low-income or fixed-income residents nationwide having to face a rent increase. 

As we look at the local impact that Crown Communities is having, there are some Candlewood residents who will be able to absorb the currently communicated increase, but they know of neighbors who are not in the same situation. While new management may have been welcome in the beginning, communication with Kodiak Property Management is reported to be difficult, and some residents are having difficulty getting maintenance assistance as they await a lease. 

Whether or not Kodiak Property Management will stick to its word in its vision for Candlewood remains to be seen. What we do know, though, is that its residents are already seeking financial assistance through the Mahomet Township even before the rent increase takes place. In addition, they are talking to Land of Lincoln Legal Assistance to better understand their rights provided by the Manufactured Home Owners Administration of Illinois.

Whatever happens, it seems clear that many of our neighbors and community members will be dealing with the fallout of these changes and that for many, the outlook is pretty bleak.