Re: doing deals in MI (long) - Posted by Blane (MI)
Posted by Blane (MI) on May 23, 2000 at 11:19:23:
Welcome to the wonderful world of mobile homes! I live Downriver and started in this business seriously the first of the year. Many others on this site have much more experience to share, but being in the Detroit area myself maybe I can help out. Hope this helps you and any others who read it. My apologies to all for being so long.
I’ve actually only closed one deal so far, so I can only speak from that experience. But I’ve learned a lot from it and my yield is pretty good. Just realized I forgot to post the results of that deal here, so here’s an example of the potential this business offers.
Bought a 14x70, 2 bedroom down in Carleton in Monroe County on Valentine’s Day for $3200 (not exactly what my wife wanted ). Thought to myself, “yeah, this is gonna be a breeze.” Life soon taught me it don’t work that way. Turns out I didn’t buy in the greatest park on the planet. To make a long story short ended up making 3 lot rent payments, made plenty of mistakes, got discouraged, etc. but hung in there and sold the place a couple weeks ago for $9500. Got $1000 down, payments of $350 a month for 28 months. To compute my yield I included every expense incurred in the business during that time, whether it specifically related to the home or not. My yield on this home came out to around 88%. Using only expenses related to the home, the yield is over 100%. If we can be total screwups and still earn 80%-100% on our investments, don’t you think this is a good business to be in?
Allow me to answer your specific questions as best as possible without rambling too much. There’s a number of things to do to get started. Ordering DOW is a good start. It’s ridiculous how much money can be made from reading this $30 book. Then you have to overcome a big hurdle: FEAR!!! Fear of making mistakes, fear of looking bad, fear of people (especially family) thinking you’re nuts, fear of paying too much and/or losing money, etc. etc. Very few people in your life will understand, which is why sites like these are so great. People here are very supportive and helpful, and I for one have appreciated everyone’s help.
The best way to overcome fear is TAKE ACTION! Read and reread DOW. I recommend Lonnie’s second book AND the home study course. While you’re reading, get out and drive through some parks. You need to learn your market. Dirk and others have advised not to start doing deals until you’ve completely read the book: I agree. Don’t get discouraged by what you see at first. It will look like all homes for sale will cost you 10K or more. The deals are out there, we have to find them. For example, yesterday I was cruising a park in Canton looking for a repo. Turned out it had been pulled. Passed a sign in a window that said “500 down, take over payments.” I did exactly what Lonnie said in DOW: don’t just take down their number, talk to them right there if you can. This old man got invited by his daughter to move to Florida. In his words, “every day I got noone to talk to here.” Felt bad for him. He had put the sign in his window the day before. Home is an immaculate 14x65 in a great park. All he’s taking out of the home is pictures and mementos. Literally everything else is staying: new furniture, all electronic equipment, $1100 vacuum cleaner he bought 2 weeks ago, dishes, 100+ CD’s, washer/dryer 6 months old, I mean everything. Went to the park manager right away, she said the only thing to do is put another rail on the steps. I can easily make a few thousand getting rid of some of the stuff. It’s not a typical Lonnie deal, but I’m sure I can profit either through outright sale or L/O. So I couldn’t resist.
Michigan requires anyone who sells 3 or more MH’s to have a dealer license. They send you this big intimidating package, but most of it is just the regulations. Quite frankly I haven’t gotten around to applying for mine. Spend your time now learning the business. MH titles are run through Secretary of State offices just like car titles. Sales tax of 6% has to be paid on MH purchases until we become dealers. Just another cost to factor in to your deals at this point.
Park managers are very important to the business. This is one area I’m working hard on right now, and for me the most difficult, as I don’t have a high opinion of my people skills at this point. But those efforts are paying off. A PM in Monroe helped me rewrite an ad, and as a result I got at least 2-3 calls a day for 2 weeks. She’s also giving me leads on people who have to sell and upcoming repos. In another park I’m trying to pull off a deal where I’d have to vinyl side the MH, but if I can buy, get sellers out of PM’s life and do the deal, the PM’s gonna love me. This part of the business takes time but will bear fruit if you keep at it.
Learn the material, go out and apply it. I see there’s a guy named Eric getting started in your area too. Saw his Lonnie ad in Sunday’s Free Press. He’s got a home for sale in Southfield. Don’t worry about “competition.” There’s plenty for all of us. Like me, you may also need to learn skills such as negotiating or selling. So what! Do we want to do whatever it takes to be successful, or not? Whatever you need to do, just attack it one step at a time. Do what noone else in your life wants to. If you have a significant other in your life who doesn’t understand or agree, be patient with them. When they start seeing your success, they’ll come around. Last night my wife was looking at Mr. Tew’s book Get Rich Helping Others, and suddenly the light bulb went off in her head: “hey this will really work!”
Sorry this is so long. I love talking about this business. Drop me an email if you’d like to talk more.