Bad neighborhood?? (long) Please Help. - Posted by jim jr

Posted by jim jr on July 06, 2003 at 17:28:00:

Thanks a lot for the relpy. I am pushing foward and hoping for the best. I guess every one has that anxiety some time or another. I have thought about it before but have been too excited to let it get in my way. But now that I had my Dad actually talking about inaction, and just letting the lots sit there out of fear of someone tearing the homes up, really made me start thinking. I appreciate your comments and will be sure to let you know how things go.

Bad neighborhood?? (long) Please Help. - Posted by jim jr

Posted by jim jr on July 06, 2003 at 11:48:42:

I am trying to do my first deal and I am getting nervous. I bought some land (4 lots) when I was home on leave in SC. The land is in a rural area, low income area. I did by the land in hurry because I was on my way over seas and wanted to get started. I had been studying real estate for a year or so and was tired of reading. Now I am worried that I made a mistake in buying the land.

I just got the first lot cleared, drive way cut, and had a septic tank installed. My father is coordinating all of this for me, and can get work done pretty cheap. I got the lot cleared, driveway, and septic tank installed for $1400. My dad knows nothing about real estate investment, but has been a private contractor for years, and has worked in every area of the home business (building, remodeling, vinyl siding, etc.). I just got off the phone with my father and now he starts telling me that he hopes I didn’t make a mistake by trying to do business in this neighborhood.

My orignal plan was to clear the lots and do some land/home deals, by renting out the land and selling the mobile homes Lonnie style. Now that I am ready for a mobile home to go on the land, he starts telling me that he is unsure about the area. He says he just doesn’t want me to lose my money, by placing a home on the lot and having it vandalized. He says a rode around the area more, and saw a few really old and run down, abandoned trailors. Also, when he was going to check out the lot after the work had been done, there was a lot of “young people” hanging out on the corner lot of the road that my land is on. He said they were all drunk, bla bla bla, and were waving him down because they probably thought he wanted to buy some drugs or something. So now he is scared and is unsure of the area. I knew the area was poor but the land was only 14,000 for 4 lots a .9 each (3.6 acres). The land has quick access to a major interstate (I-20) and is 10 miles from a new, developing industrial park with 5 or 6 new businesses in a shopping center (KFC, Pizza Hut, Wendys, etc.). But like I said, is a very low income area. There is not a shortage of used mobile homes where I am from.

So now I am at a fork in the road. He tells me that we should just try and rent the lot for $150 a month and let somebody else worry about the trailor. But I say if we rent the lot, that means somebody will be moving a home there to live in, so why not sell them that home and make money off of both ends. He says that it could sit there for months, and some young punk could ruin it. Then I say, well you have to take some risk or we will never get anywhere. I will not have to invest a big amount of money in the home. I can get one for $2,000 or $3,000 and my father is going to do most of the work for next to nothhing. We can get homes moved for a couple of hundred bucks and my father will set them up.

So what do you guys think? I have to do something. I pay $137 a month for the land payment and I want to get moving. I have the cash to buy the first home and get it set up. Is it too risky to put the money into this rural, poor neighborhood? I am starting to sweat over this, but at least I am gaining experience. My point to my Dad was that, the caliber of people who will be moving into this area, are more likely to buy if the home is already set up and ready to move in with low monthly payments. What are the chances of them moving the home there themselves, and if they would, why not be the person to sell it to them. I just think if I go with just renting the land, that it will just sit there and rot. But that could happen with the home as well.

Any suggestions? Sorry this is so long, but I just got off the phone with him and my blood is pumping. I have searched the archives and I have read DOW (read DOW after I already had the land). Is my dad being over cautious or did I make a bad move? Any adivce is greatly appreciated.
Thanks, jim jr.

Re: Bad neighborhood?? (long) Please Help. - Posted by Dee-Texas

Posted by Dee-Texas on July 08, 2003 at 07:26:03:

Hi Jim,
I haven’t had time to read all the replys that you’ve gotten but with this great board I’m sure you have your blood pumping to BUILD YOUR RE EMPIRE!!
I would do as Mike suggested and check on the other mobiles, you might just steal them. I have done the same thing with houses. I just finish the one I bought and start buying the junkers one at a time and turn around the neighborhood. The other homeowners on the block start, painting and sprucing up their own properties.
As far as your lot, I would buy one mobile. Then check with your police department, sheriffs department and or fire department and offer this home at a good deal. These guys don’t have the best credit but with a police crusier setting on the property makes this a stay away zone for the area tuffies.
Great $uccess,
PS…I too want to thank you for your service in the military …AND…I’m waiting to hear about your SUCCESS story…Go get 'em!!

Re: Bad neighborhood?? (long) Please Help. - Posted by Mike(Al)

Posted by Mike(Al) on July 06, 2003 at 22:27:25:

Jim,Congradulations you seem like a young man with your head on straight.I smell an opportunity to improve the neighborhood.Have your dad find out who owns the lots the abandoned homes are on.You may be able to pick up these improved lots and probably rehabable trailers for $3,000.00-$4,000.00.Thanks for your contributions to the board and your service to our country.

Re: Bad neighborhood?? (long) Please Help. - Posted by Al (Wi)

Posted by Al (Wi) on July 06, 2003 at 17:50:15:

Ask dad to get a BIG DOG, a lamp, a radio, 2 appliance timers ($6 each)and a shotgun.
Ask him to take the dog most of the times he goes to the property, and leave him there alone for short periods, so the locals will think he may be there if dad isn’t. Plug the lamp and radio into the appliance timers to go on-off every 3-4 hours, so the druggies will think someone is home. After he sees the ‘right’ people drive by, shoot the shotgun (into the dirt) a couple of times, soon enough for them to hear the shots. Play with their minds. Your business reputation is worth the trouble it takes to build.
Until you get back, keep a low profile by looking for a buyer who wants a fixer-upper, so dad dosen’t have to make the outside curb appeal so good that it attracts the druggies to the property. Fix up the inside for the female customer.
HTH, stay safe.

Re: Bad neighborhood?? ??? - Posted by Ed Ortiz

Posted by Ed Ortiz on July 06, 2003 at 16:28:14:

Don’t you worry my brother…

Your story reminds me of my own…when I was 20 I wanted to start out by buying a duplex in Texas where I was stationed. My Dad being the “cautious type” that he is and living in Puerto Rico, thought I was crazy. He pointed out that it would be a mistake to buy a house with TEXAS being so “far” away.
Me, being so naive and hard headed, went ahead and bought the property anyway…1 dollar move in and collected 400 dollars in rent the same day from my next door neighbor/tenant. I have had this property for almost 10 yrs. now and it has been bringing in an average of 300 a month after bills ever since then. By the way now I’m stationed in Orlando FL. and basically the only time I think about this property is when I see an extra 300 on my bank account.
To me it sounds that your dad like mine are the “cautious type” and he does have genuine concerns for your economic well beign but then again…How many properties do they own???

Ed Ortiz
R.E.Investor/U.S.Army Recruiter

Re: Bad neighborhood?? (long) Please Help. - Posted by Tony-VA/NC

Posted by Tony-VA/NC on July 06, 2003 at 12:37:32:

Jim this is little more than a delayed case of buyer’s remorse. Don’t let your dad’s fears become your own. Just remain confident that all will be well.

With the land/home deals you have alternatives that you otherwise would not have in traditional creative real estate investing or in a typical Lonnie deal.

You may not want to rely upon others to bring their homes in (at least not initially). If you have one or two set up, that look nice, you may be able to encourage others to move homes in but I would not count on that as Plan A.

You may want to fix the homes up and try and sell them Lonnie style. Then all you have to do is worry about the dirt (how much worry can that be).

If the homes are not selling quickly enough, due to the neighborhood, then I suggest you seek to rent the land/home via section 8. You are likely to get a higher net income and if your dad can rehab a home, he is certainly qualified to make occasional repairs.

The greatest fear for renting seems to be damage repairs, followed by the concern about the transient tenant base. Section 8 inspects twice a year and provides you a monthly income stream (on time).

The section 8 payment contribution can solve the payment concern as well as alleviate some of the damage concerns. Their inspections keep the tenants on their toes (if the tenant wants to remain with the program).

Tenants can damage a home regardless of what it is made of. Stick built homes are far more expensive to fix than mobile homes. Most damage in mobile homes is cosmetic. You can have the work done quickly which returns the home to the market quicly. Even if you have to pay a contractor, you are back in business quickly with the re-rental income offsetting the losses more quickly.

Overcome the fear one step at a time. Direct Dad’s attention to the work at hand (getting the home on the lot, set up and fixed up). Tell him you will be responsible for worrying about the neighborhood so he can concentrate upon the tasks at hand.

Best Wishes,


Slumming on the mobile home board? - Posted by Karl (Oh)

Posted by Karl (Oh) on July 08, 2003 at 20:48:33:

Hi Dee!


GREAT suggestion! - Posted by Anne_ND

Posted by Anne_ND on July 08, 2003 at 09:03:22:

Thanks Dee!


Re: Bad neighborhood?? (long) Please Help. - Posted by jim jr

Posted by jim jr on July 06, 2003 at 18:07:28:


That is a good idea about the appliance timers. I will have to call him back soon and tell him all of the responses I have gotten from this post, already. Funny about the shotgun; I am in Turkey and he is thinking about getting a hand made, carved shot gun here because they are so cheap compared to the states. Maybe he can try out over on my land. These people seem to be the drug dealer type, versus the druggie type. They would probably shoot back. :slight_smile:

Re: Bad neighborhood?? ??? - Posted by jim jr

Posted by jim jr on July 06, 2003 at 17:43:47:

Thanks Ed,

I know my Dad is just worried. I have already realized that I have to light the fire, and that it is my venture.

I plan to do the same thing you did with the Duplex when I go back to SC. I am going to build a Duplex and do as much work as possible myself, and we are going to sub out the rest. My father and I are going to do a lot of the trim work and painting and a friend of mine is going to frame it.

It must be nice being stationed in FL. Good luck and thank you for the encouragement. It is nice to know that I am not the only one on the planet with these types of concerns and issues.

Recruiter huh? If you are anything like my AF recruiter, then you should be good at negotiating your Lonnie deals. :slight_smile:

Well said! (nt) - Posted by Eric C

Posted by Eric C on July 06, 2003 at 16:35:26:


Re: Thanks Tony-VA/NC - Posted by jim jr

Posted by jim jr on July 06, 2003 at 13:11:19:

Thanks a lot Tony. I was hoping you would reply, because I have read many of your other posts regarding land/home packages.

You are right about the damage repairs; my dad can do them all, and wants to. It almost seems crazy for me not to try, with all the experience I have in my corner. My entire family and friends network consists of people in one facet of the business or another. But no one seems to have taken the steps to investing. So I am trying to learn as much now, save cash, and pull all my resources together to make it work.

I think that his biggest worry is about it sitting there “unguarded” and being a 15 min drive away from his home. We have talked before, and he was the one reassuring me about making repairs. When I first started, I was the one worried with questions like, “What if the tenants mess up the home and bail?” He was the one telling me, “No problem, I can make one of those mobile homes look like new with $500 in material (paint, carpet, etc.).” Now it seems that he is just worried about it sitting, in such a rural area, vulnerable to the thugs on the corner. He told me that once someone was in it, he wouldn’t really worry about it, because it just wouldn’t be sitting there, open for the taking. I told him that if there were so many 18-25 year olds hanging out and getting drunk, if all else fails, one of them is bound to get the other pregnant, and will need a nice, affordable living area. That’s where we step in. :slight_smile: For some reason, he is freaking out about these drug dealers seeking refuge in the trailor before it is occupied. I will just have to keep pushing foward.

You are so right, and your input is greatly appreciated. Did you change from Tony-VA to VA/NC? Did you move?

Thanks, jim jr

Re: Slumming on the mobile home board? - Posted by Dee-Texas

Posted by Dee-Texas on July 08, 2003 at 21:31:26:

I miss all my mobile home buddys. I like the posts because they usually cut to the chase in RE investing. I think that DOW is one of the BEST books. You can read that book and do…notes, houses, mobiles…it’s back to basics.
Great $uccess!

Thanks… - Posted by Ed Ortiz

Posted by Ed Ortiz on July 06, 2003 at 17:48:54:

You Know it…Travel, Adventure and Money for College…
On a serius note though…
Thanks for keeping us safe and in the name of all of us in this board. Good luck.
Ed Ortiz

Re: Thanks Tony-VA/NC - Posted by Greg Meade

Posted by Greg Meade on July 06, 2003 at 16:02:45:

Jim, read tony’s advice and it sounds good. i am in the middle of my first lonnie deal and also own a small park. You have taken the first major step, bought some dirt. there will always be good people with bad credit needing affordable housing. Why not try this first one and see how it goes. you might be very suprised. Last but not least, you are double blessed by having the Dad you do. My guess is he will be your eyes and ears (and hands) til you come home.
Best of luck, please tell me how you do!!

Re: Slumming on the mobile home board? - Posted by jim jr

Posted by jim jr on July 09, 2003 at 06:45:45:

Thanks for all of the replies. I get surprised all over again every time I post a question. The responses are awesome.

Thanks, jim jr

Re: Thanks… - Posted by jim jr

Posted by jim jr on July 06, 2003 at 18:12:38:

No need to thank me, but thank you as well in return.

It is funny you should say…Travel, Adventure, and Money for College… I have received all 3 in a big way in the 3 years I have been in. The AF kept up their end of the bargain, and I am keeping mine.

Take it easy, jim jr