Posted by Jackie in Dallas on May 26, 1999 at 18:22:47:
Yes - the beer. Some people think it’s more important to get drunk in style(Corona) and have cigarettes to smoke than food on the table for their children. Visit any of the mobile home parks in the Dallas area and you’ll see exactly what I mean.
Am I in Mobile Home HELL? Lonnie, what do I do now? - Posted by R. Smith, Jr.
Posted by R. Smith, Jr. on May 25, 1999 at 20:17:23:
I’ve been lurking around CRE Online for about two weeks now. Last week a took a step of faith and ordered “Deals on Wheels.” For the next several days, I eagerly awaited the arival of the mail carrier each day. Yesterday the book arrived, and I’ve been reading it non-stop since then.
Yesterday after work, I decided to drive through a few mobile home parks on the way home from work. I spotted about 8 “For Sale” signs in the windows, and wrote down the telephone numbers.
This morning I called all of them from my office. After finding out how much these homes are listed for, I don’t know how I’ll be able to do any “Lonnie Deals” in my area. Listen to these prices:
#1 … 14’ x 70’; 2BR/2BA; 1974; $24,900
#2 … 14’ x 70’; 2BR/1BA; 1982; $39,500
#3 … 14’ x 70’; 3BR/1BA; 1971; $16,900
#4 … 14’ x 65’; 2BR/1BA; 1977; $14,000
#5 … 12’ x 65’; 2BR/2BA; 1972; $18,900
I could go on . . .
Now all of these are in the same park, so I looked into a few others. Another park has one that’s a 14’ x 70’, about 12 years old, and they are asking $18,000.
The best prices that I could find was $8500 for a 12’ x 45’ with 2BR/1BA, propane heat and stove, and about 30 years old. Should I give up before getting started? Lonnie describes buying 15 year old mobile homes for $2500. I’ll be lucky to find one for $25,000!
Now I admit that my search hasn’t been exhaustive yet, but I’m definately discouraged. I must admit that the park where I found the 8 “For Sale” signs is a very nice park. I did find a park where I might be able to find some better deals, but to be honest, I wouldn’t even feel safe walking around in it. It’s absolutely disgusting. All of the roads are dirt and you have to drive through huge puddles just to get around. All of the yards are cluttered with overturned wheelbarrels, and broken lawnmowers, etc… Several of the houses had a man with a beer belly standing in his doorway with no shirt on rubbing his gut and surveying his delapitated domain. I’m not making this up. None of the lawns have been cut in a long, long time as I’m sure that the residents are too busy watching Jerry Springer to be bothered.
Do I really have to stoop to this level in order to make a buck? I wouldn’t feel right putting a young family into a park like that either.
What can I do? Any advice or encouragement is appreciated. I’m not giving up yet, but I’m losing heart as these mobile homes are a lot more expensive than the ones that Lonnie describes.
Thanks,
Bob
Re: Am I in Mobile Home HELL? Lonnie, what do I do now? - Posted by Branden Bestgen
Posted by Branden Bestgen on May 26, 1999 at 11:31:44:
You might want to go back to that delapitated mobile home park and find out who the owner is. Then purchase their headache, get rid of all the garbage (people included) and now you’ll have your own mobile park to do your Lonnie deals in. By the way, most investors are not looking for that type of park so getting the owner to finance the majority should be no problem. Figure out our purchase price and offer them 40% down or less and they carry the balance on a 2nd mortgage.
Branden Bestgen
Mh’s and attitude - Posted by Dirk Roach
Posted by Dirk Roach on May 26, 1999 at 04:17:31:
Hi Bob,
I read your post tonight and a few things have made my eyebrows raise. I must admit that over the course of the evening I kept thinking about your post and a few conversations that I have had with various folks since becoming a MH nut.
The Lonnie Scruggs Method in creating notes which are secured by a used Mobile Homes is one of the best investment vehicles that I have personally found.
However it is an interesting business, and there are a few common sense ground rules which you have to understand and implement to succeed in it.
In Lonnie’s materials, he describes and teaches a great game plan which has worked very well for him. However, as with any business you will have to tailor his lessons to meet your market and your business goals.
Personally I have made adjustments to my MH business, which sometimes differ a little than Lonnie’s method’s, only for one reason though, those changes work for me.
So nothing is simply cut and dry. Also when you have a few of these deals under your belt, you will find, very quickly that every deal is different and you will find yourself tweaking the plan once again to meet those differences.
Now onto the part of the post that I personally feel will do you more harm than good, is the attitude about the park that you admit may be a workable park for this type of investing.
Simply put, I think that you might be experiencing a bit of culture shock. The type of folks that you will have to get used to dealing with in the mobile home parks are typically blue-collared families. Many of these people are hard working folks who are just trying to get along and make ends meet.
Personally if I worked in a factory, or on a dockyard, or whatever, all week long, for typically a $300.00 per/week paycheck; I have to tell you I might not feel like rushing home and cutting the grass.
It’s just something that you are going to have to get used to.
Just remember that these folks earn an honest buck, and will PAY you that buck, for helping them out.
Another thing is in order to deal with these folks you kind of have to learn to understand them and in often times learn the art and technique of mirroring them and of wearing the uniform of the situation.
These are some things which anyone getting into mobile homes, needs to think about. If you are disgusted by a few mud puddles, or a guy without a shirt, then this might not be the business for you.
But let’s get real. Fact of the matter is, what we are talking about are giant yields on small investments, which you are going to be very hard pressed to find anywhere else. Your panicking over eight FSBO signs, 2 parks and a guy with his shirt off. I mean this with utmost respect, but frankly MY advice is: Suck it up and get back out there. Frankly you don’t have nearly enough reconisence data yet?
I don’t know what market you are in but I can Guarantee you that there is money to be made there, the “disgusting” park tells me that.
I’m not trying to be hard with this advice, I’m just trying to help. If you want to reap the rewards that I and so many others have your going to have to learn your market more. And be a little more tolarate.
So good Luck and keep us posted on what happens Bob,
Dirk
Re: Am I in Mobile Home HELL? Lonnie, what do I do now? - Posted by Tim_AZ
Posted by Tim_AZ on May 26, 1999 at 24:18:36:
Here’s what I do. I am just starting out as well. My experience so far is finding MH’s that are 10-20 years old that are in the $15-25k range. They are usually listed by dealers and agents (I call them snakes). But the older ones (20-30 years) range from $2000-$8000 or so, and are FSBO. That is where I want to start off. I could get a MH in a senior park for real cheap, but it would be difficult to sell it in a senior park.
I started by going into the phone book and finding “Mobile Home Parks”. I copied the pages and highlited all the parks in my area. Then I drive to each park to get an idea what it’s like. It’s all about learning the market. I get discouraged sometimes, too, but there are more parks to see…
Cash is King - Posted by David Alexander
Posted by David Alexander on May 26, 1999 at 24:11:25:
Got to Remember, Cash is King. what they are asking and what they’ll get are two different things. Figure out what they will sale for with financing is the first thing. Thats just simply driving to parks, talking to park managers, and learning Mh value, it’s kinda a just get a feel for it thing.
Then start making cash offers, start askin if I could give you all cash tomorrow how much would ya’ take.
Also in most homes they leave the appliances, I think if I had to put more than 3,000-5,000 for one then I would sell the the appliances on a rent to own plan also to get my yield back up to Good Enough.
Then again in your neck of the woods sounds like you maybe creating notes that will run 10 years or more maybe.
Also, you’d be surprised at how many will call you back a month later and ask you if your still interestted.
Good Luck
David Alexander
Re: Am I in Mobile Home HELL? Lonnie, what do I do now? - Posted by Barbara
Posted by Barbara on May 26, 1999 at 24:10:09:
I haven’t done Lonnie deals yet but am about
to. My experience was in selling a mobile
home. This was 30 years ago but I’m sure it
still holds true today: We purchased a 10 X
52 Parkwood mobile home brand new in 1965. It
was perfect for a married couple w/child at
the University. After school, moved it to
begin new job. 1970, job success, wanted to
sell and buy house. Put sign in window, then
ad in paper. Paid $3500 new so to sell quick
we asked $1900. To make a very long story
short–we gave the mobile home away to finally
get rid of it. (After reading Lonnie’s
articles I could have financed that home and
made a good profit–can’t believe I didn’t
think of it.) I too have driven around in the
parks recently and have called to get the same
response you speak of (high prices)–just like
the “high” price I gave people 30 years ago
when they called me–but one guy that called on our mobile home came out to check it out and said “well I can’t pay anything like that
price–but if you can’t get your price, call
me, I could take it off your hands”–I was
really perturbed at his rudeness–imagine the
nerve of this guy!! Then we found a house we
really wanted and after many months of
“asking” our price–I was thrilled the day he
took it off our hands–for only a hand shake!
(I know this guy must have talked to Lonnie!)
So the other day when I saw 16 “for sale”
signs on mobiles in a park of 50 homes–I knew
Lonnie’s ideas would work. I stopped and got
info and prices.(really high prices) but sure
didn’t get discouraged–because I all too well
remember the day in 1970 when I thought that
guy was great to take our mobile home off our
hands–even after thinking we’d surely get a
good price. Actually I’m thankful for that
experience because now I know I can do “Lonnie
deals” and I’m looking forward to reaping my
rewards from th
Re: Am I in Mobile Home HELL? Lonnie, what do I do now? - Posted by PBoone
Posted by PBoone on May 25, 1999 at 23:55:29:
The pricing for Mh’s varies from area to area. Here in the Pacific NW we find them on the upper end like yourself. I have found pockets where the 2500-3500 prices exists.
In the Southeast US I have family that owns a MH park and can purchase all day long for 1000-2000 It really does not matter where you are or at what price it is what the market will bear. So if the area is typical 18K to 24K your purchase price is to be at a price point that will give you the kind of returns lonnie speaks about.
Pat
Re: Am I in Mobile Home HELL? Lonnie, what do I do now? - Posted by Steven
Posted by Steven on May 25, 1999 at 22:31:32:
WOW, that is expensive. Just one question. Are you sure that price is for just the MH and not the lot. Those prices sound like the price of the land plus the MH. A tipicle (sp?) Lonnie deal is just buying the home and not the lot as i’m sure you know.
Just dobble check that. If not I don’t know what to tell you. I’m not a pro (yet).
Good luck to you.
Steven
Re: Am I in Mobile Home HELL? Lonnie, what do I do now? - Posted by Robert(AL)
Posted by Robert(AL) on May 25, 1999 at 22:22:03:
Bob,
Don’t give up the search. You will find something if you are persistant. I too am just starting out in the world of wobbly boxes and I’ve driven through a few of the parks you described (thought I might get shot at any time in one, especially when driving past the mh that had a rebel flag in the front window that read “the south shall rise again”) We were definitely driving in the wrong car to be in that park.
I have be able to find a few deals that are worth considering though and I am very optimistic.
Just keep driving and calling and talking to people. The deals will come.
Just for laughs, check out this site. I posted this a few days ago. I think you will enjoy.
http://www.kelleys.org/mhomes/
Good luck,
Robert
Re: Am I in Mobile Home HELL? Lonnie, what do I do now? - Posted by CarolFL
Posted by CarolFL on May 25, 1999 at 21:27:17:
Take heart. My husband, Dennis, just launched into the MH ibz … and at first all he found were such prices. Then, in a park of 13-28k, up pops one he could get for $5700! Now all we need to do is sell it… but we know the price was right.
Keep the faith!
Carol
Buying the “run down” park . . . Good idea. - Posted by R. Smith
Posted by R. Smith on May 26, 1999 at 22:28:13:
I was thinking along the same lines myself. I just have no idea what this would entail. I think that my partner and I would probably be able to raise the capital to do, but we know nothing about running a mobile home park.
Anyone have any suggestions about how to go about this? Should we talk to the city first, and suggest our idea to them. I wonder if they wouldn’t be willing to provide some sort of incentive either to the current owner to sell, or to us if we do purchase, as it would certainly help property values for the homes near by because the park in its current condition is absolutely disgusting. I can’t imagine that the city is happy with people associating that park with their town.
Any ideas on how we should approach the current owner? Or the best way to LEGALLY enforce a “Shape up or ship out” policy with the current residents. If we did do this, we would probably want to have the lot rent include a fee for general landscaping. This should provide for a consistently nice appearance. We would also want to have strict standards for upkeep of the homes, so that the park maintained a good look.
Any advice at all is appreciated.
Regards,
Bob
Re: Mh’s and attitude - I might add - Posted by Jackie in Dallas
Posted by Jackie in Dallas on May 26, 1999 at 10:48:02:
Be prepared for ANYTHING in mobile home communities! Don’t be too surprised if you see a guy walking around with a snake around his neck or the lady down the street with the pot bellied pigs playing in the yard.
And that funny smell in the air throughout the park is most likely pot (not the kind you cook with either).
And don’t forget the Corona - it’s synonymous with mobile home parks
Re: Am I in Mobile Home HELL? Lonnie, what do I do now? - Posted by R. Smith
Posted by R. Smith on May 26, 1999 at 22:40:37:
Steven,
Believe it or not, that’s just for the home itself! That was the first thing that I asked. I think they feel that they can get such a good price because it is in such a nice park, and the park doesn’t have any openings, and according to the park managers office, it never does. It seems that this manager is wise to the program, and when a vacancy occurs, he throws one of his own used mobile homes on there and then makes a killing.
Bob
Re: Am I in Mobile Home HELL? Lonnie, what do I do now? - Posted by R. Smith
Posted by R. Smith on May 26, 1999 at 22:50:20:
That web site is a classic. The commentary underneath the pictures of the mobile homes is priceless. There is a whole other world out there. It’s scarry.
Bob
Re: Buying the “run down” park . . . Good idea. - Posted by Branden Bestgen
Posted by Branden Bestgen on May 27, 1999 at 09:51:07:
Regarding talking to the city. I don’t think talking to the city first will be of gain to you. They don’t have anything to offer, unless they have some sort of clean-up program. If you do end up purchasing it you might be able to negotiate with the city to haul garbage to the dump for free. Worth a try anyway.
Before you get in too deep, take a good look at the place. Make sure the infrastructure is ok (water & sewer lines, electrical, etc). Cosmetics is not a problem, but if this is your first deal I don’t know if you want to tackle infrastructure problems. If this was a project I was looking at, I would determine whether the problems were bigger than I wanted. Then I would go to the courthouse and look through the records to find the owner and also find out if there are any lienholders. Then I would call the owner and ask them if they’d be interested in selling their park. If yes, then I’d ask if they have any idea how much they’d want for it and what the major problems are.
As soon as you take over you send everyone a letter describing the new & improved park, and a new lease. Those that don’t comply can leave. You’ll have to check your local laws regarding tenants to find out how much time you have to give them. I would highly suggest you purchase at least the following courses if you want to go this route. Bill Bronchick-“Real Estate Lawyer”, Ernst Tew “Get Rich Helping Others”, and Wright Thurston “Diamonds in the Rough” and “Fair But Firm Landlording Techniques”.
Branden Bestgen
Corona?? - Posted by B.L. Renfrow
Posted by B.L. Renfrow on May 26, 1999 at 11:30:54:
“And don’t forget the Corona - it’s synonymous with mobile home parks”
You mean the Mexican beer? One of my favorites…and WAY too expensive for most folks in MH parks around here! (