You are doing this guy a favor. If they were any good, he would have sold them.
I would want them for free. Estimate the time that it will take to fix up and sell them, and I would want the lot rent free up to that time limit. Try to stagger the deals. If they are in bad shape, it may take you one to two months to rehab. Get DOW. After looking at them, if you can’t triple your money, forget them and focus locally.
I have an opportunity to acquire a few MHs (unseen so far, will be traveling out to see them in the next day or so) for free. The owner is tired of dealing with them and he owns the park. He says with a little work they could be rentable but is requiring $300 lot rent to take them over and a 3-month contract so $900 each to acquire (and provides me with 3 months rehab time).
If I can get free and clear title to all (or at least the best of the lot), should I get them now before someone else or take a couple and pass on the rest until I have these sold.
I haven’t purchased “Deals on Wheels” yet but plan to in the next day or so. I think I could probably work with the owner to give me a little time to do the rehab on one or two w/o having to pay the lot rent up front and maybe pay it out of the sales of the MHs.
Also, I work for the man during the day and it is about a 1.5 hrs drive to the location for me one way. I was thinking that I could maybe get the work started and then turn it over to a friend that is in construction to finish it off. Is it still worth it?
Could be rentable? Read DOW first. You have to know your numbers. With the limited info you gave, it sounds like a good deal for the owner of the park, not you. What will they rent for? What would they sell for? Will the owner let you do a Lonnie Deal or is he setting you up to fix the places up then take them back from you when you can’t unload them.
You work for the guy so you know him. Why is he pressuring you into a 3 mo contract. If you take one, fix it and sell/rent it in the first month doesn’t he still get paid? Isn’t it lot rent he is after? Then do the next one.
A typical free deal for me would be, I get title to the home, I will pay lot rent for the months I am rehabing. I will then sell the home and the buyer will take over lot rent. In many cases the PM is desperate to have someone rehab the home so free lot rent or reduced lot rent is negotiated. Otherwise the home will be pulled and the lot will be empty…read NO LOT RENT.
You are a motivated buyer. Don’t be. You don’t have to take these problems off his hands. Negotiate a better deal.
Ray (MO)
You are correct. I haven’t seen them yet so I’m not sure how far away they are from being rentable. I do think if I decide to do this I could negotiate a better deal than a 3-mo contract for each.