Finding a manager for MHP's - Posted by Briton (IN)

Posted by Philip on September 15, 2003 at 01:21:21:

Yeah, here too. Plenty of private financiers also. I was wondering if there was a consistent source of land/home packages to buy at wholesale type prices. It must take just a little bit of this and that for Tony to answer with the “33 ways to find motivated sellers” advice.
Thanks,
Philip

Finding a manager for MHP’s - Posted by Briton (IN)

Posted by Briton (IN) on September 13, 2003 at 15:45:13:

I have been thinking of my next investment to take on. I have searched multi family houses, and a few other things. I was also thinking i could get another park. There is a park for sale about 1 to 1&1/2 hours away from me that i am interested in. It has a manager that would like to stay. BUT i am worried that when he leaves i will have 1&1/2 hour drive 4 times a week. How hard is it to find a good manager usually? Anyone ever deal with this. I plan on taking care of my current park forever by myself because its so close, so i have never dealt with this. Thank you, Briton (IN)

Re: Finding a manager for MHP’s - Posted by Wayne (IN)

Posted by Wayne (IN) on September 15, 2003 at 06:27:34:

If the PM wants to stay, make it worth his time. If the pay is fair, work out a bonus plan. You could probably keep him. The PM could help make you a lot of money.

Re: hey briton… - Posted by Greg Meade

Posted by Greg Meade on September 13, 2003 at 17:54:17:

have a park and several land/home thangs and i agree with tony on this…unless. Tony is right in that ind. homes on land are a great investment. i have mine on long term (20 year) notes 10 -11% interest. pyments of 568 per month. Example 1996 28X66 d/w on 1/4 acre. Sale price 60k. 5k down and 567.71 per month at 11% for 20 years. this will give me approx.141k over 20 years. Bad news i have 22,547 invested(and no b it’s not OPM, it’s my money). I am trying to do 4 of these per year to augment retirement. The numbers aren’t that great(compare to a lonnie), except with the 5k down i am out 18k but it brings in about 6812 per year or 38% cash on cash. A very nice deal for all!
I agree with you because of the volume of money involved with a Park. If you have say 25 spaces each bringing you 200 each per month, you got 5k rev., after expenses say 3k net. Another 1k for management, puts 2k in your pocket(if there are no suprises. Say for yucks you paid cash for this park …lets say 250k, this would give you less than 10% NOI. The whole exercise would depend on price and terms od Park. I currently have 13 options on mobile approved lots and have my park for sale. With the 4 l/h pacs i got plus 13 more, I will be netting over 9k per month with same money out of pocket. the advantages are manifold; no tenants calling, no more tore up units, midnite move outs, depreciating assets (wobbly boxes), late pays, etc. All i’ll do is deliver 240 deposit slips to each “owner”, make sure taxes and ins are paid annually, send out notices each year showing how much interest is paid on each note.And if i ever get broke, sell the note…an 11% note well seasoned is a very good instrument. The real beauty ids with a llc each individual property stands on it’s own so if one gets siezed, etc. the whole park is not impacted. For me, I like these l/h pacs!!! Good luck!

Re: Finding a manager for MHP’s - Posted by Tony-VA/NC

Posted by Tony-VA/NC on September 13, 2003 at 17:24:25:

Briton,

Have you considered single lots with older mobile homes? I like my small park but I really like the individual land/home packages.

Chances are you can find more of them in your own back yard. These hybrids of real estate and mobile homes are something I strongly suggest you consider.

Rather than trying to manager a park manager an hour and half away, manage your individual tenants in your own backyard. The addition of these tenants to your current tenant base is a relatively un-noticed transition.

Tony

A few Differences - Posted by Tony-VA/NC

Posted by Tony-VA/NC on September 13, 2003 at 20:29:01:

Greg,

I am glad you see the value in expanding investments not only into parks but also the land/home packages.

The differences are your figures appear to run close to retail for these homes, though no doubt your area prices may vary from mine, the fact that you are buying at retail or using retail like terms may be what is damaging the income stream.

What I am suggesting to Briton is to look for motivated sellers of older mobile homes on land. These folks face many of the same oppositions that our Lonnie deal sellers face. They have a need to sell (for one reason or another) but none of the people interested in the home can seem to qualify for financing. The sellers cannot or will not provide that much owner carry financing to these credit risk homebuyers.

Just as the investors in traditional real estate, we must locate these motivated sellers and solve their problems. All of the creative real estate techniques are at our command on these deals.

You appear to be obtaining bank financing (or similar terms) which require you to come out of pocket with too much cash.

The solutions to this problem are the same ones employed by the intestors here on the main newsgroup. Subject-to deals, owner financing (or owner carry seconds), hard money deals, lease/options, wraps etc.
Banking relationships can improve your cash flow by providing better terms, especially when you are buying at a wholesale price.

Ask yourself this,“how many of these land/home packages could you do if you did not have to shell out $5,000 each?”

If your location has land/home packages, then you will begin to find the older land/home packages that can be aquired at wholesale prices (or terms) and marketed for rent (as in my post to Briton) for greater cash flow while capturing some equity.

We can, as you seem to indicate in your post, then increase the equity position by owner financing ourselves at a higher price if we so choose that exit strategy.

Briton, from what I can tell, is doing quite well at a young age, at aquiring and operating long term income streams. I am prejudiced here. This is my chosen niche. I prefer long term income vehicles that will provide for me now and in the future, regardless of my health or desire to create new business (ie retirement).

To each his own, no way wrong. Just a suggestion that you ask yourself that question again,“if I didn’t have to pay out $5k per deal, how many could I do?”

Best Wishes,

Tony

Where do you go about finding such deals? - Posted by Briton (IN)

Posted by Briton (IN) on September 14, 2003 at 01:34:42:

Where do you find such deals Tony. I like the idea. In the paper what are those usually under? What do you look for? What are other good sources to find such deals? Thanks, Briton (IN)

Re: Finding a manager for MHP’s - Posted by Mike(Al)

Posted by Mike(Al) on September 14, 2003 at 01:19:51:

Tony,What about buying a park and condominium it.Sell the lots to the tenants on contract.Any lots not sold to tenants retain and rent the dirt.

Tony, i actually do… - Posted by Greg Meade

Posted by Greg Meade on September 13, 2003 at 20:45:11:

some deals where i purchase older mobiles on land for very good prices. where i have veered from your and Britons rental income stream (or lonnie streams) is i am experimenting with removing the 30 year old beaters and placing nice, newer double wides on lots and selling on terms as stateed above. you are right! It all pays well, i am just tired of being a landlord!! The deal i described in the post above was an improved lot for 7800, repo for 11k,transpo and tiedowns, permits, driveways,skirting and decks for 6,800. Sell on long term note (11%) with payments like rent for 20 years. No banks,no financial institution.
Guess what it all boils down to is how do you want your return…thru rentals or thru Notes. Tried rentals for 22 years, gonna try Notes now! To each their own, but i would really like to hear from others who have changed from rental to selling on Notes with mobiles on land!!! Good investing!

“33 Ways to Find Motivated Sellers” - Posted by Tony-VA/NC

Posted by Tony-VA/NC on September 14, 2003 at 11:18:10:

Jim Kennedy wrote a post years ago that has since been memorialized in the “Money Making Ideas” section here.

The title of the post and article is “33 Ways to Find a Motivated Seller,” the link is:

I mentioned the following suggestion in another post to you a moment ago but will repost it here.

When we invest in land/home packages, we have accessed a hybrid niche between real estate and mobile home investing.

Lonnie has taught us the mobile home business quite well. That knowledge is what puts you in the driver’s seat of a niche that few traditional real estate investor would ever consider.

But you are investing in Real Estate and as such, you need to know how that game is played. You need the toolbox to solve the problems of these land/home package sellers. The courses here can give you all you need. As I mentioned in the other post, I have a favorite course (but it has changed names so I have to figure out what it is now called).

The money you spend on a good course like that one will be what you need to begin land/home investing.

Finding sellers is no different in our niche than it is in Jim’s article. You don’t need all of his ideas but he has a great list for you to refer to.

Tony

Re: Finding a manager for MHP’s - Posted by Tony-VA/NC

Posted by Tony-VA/NC on September 14, 2003 at 11:30:39:

I have not tried this but have a few land/home packages in similar situations. They are not in “condo parks” but in neighborhoods that have a homeowner’s association that provides the water from a common well, street maitenance etc. For the most part the associations fail miserably here.

Condo conversion may well be quite profitable but I imagine it will take some time, money, effort, legal fees etc. It is a matter of what you are up for. There are several investors who specialize in converting apartment complexes to condos (See the commercial forum here). They may be of some great help.

To me I would have to look at costs, financing and time. Your financing would have to allow for this. Your attorney would need experience in such an undertaking. The red tape at city hall (my greatest frustration) could drive you insane. Your market would have to be willing to pay cash (via lender financing) etc.

Right now lenders are not jumping all over themselves to finance single wides (which is what your park is likely to consist of). You would then have to owner finance many of the land/home condos. Seems to me that if you are going to end up owner financing anyways, why not keep the land and owner finance the sale of the home?

But for those who are willing to do what others will not, there stands the opportunity for great profit. Dont’ let me deter you. Just do your homework into the feasability.

Good luck and let us know how it goes.

Tony

Tony and Greg - Posted by Briton (IN)

Posted by Briton (IN) on September 14, 2003 at 01:44:06:

If you are goin to sell do you guys ever sell the home, and rent the land. Rent the land like a MHP would, but not have the landlord problems such as toilets lights ect. Can you do this? I know many times the title to the home becomes “no more” and it just becomes a real estate package. All of this is pretty new to me. I have never left my park as far as mobiles go. Thanx guys, Briton (IN)

Re: “33 Ways to Find Motivated Sellers” - Posted by Briton (IN)

Posted by Briton (IN) on September 14, 2003 at 12:06:26:

I have read that article before, and i am goin to read it again as soon as i am done writing this. Do you have anyway to find out what course this is that you like so much? That will drive me nutz not knowing, haha. Thank you, Briton (IN)

Re: Finding a manager for MHP’s - Posted by Mike(Al)

Posted by Mike(Al) on September 15, 2003 at 24:49:18:

Tony,The #1 reason most condo/homeowner associations fail is poor management.Offer to manage the assoc. for a fee.It could turn into a good secondary income.

Re: Tony and Greg - Posted by Tony-VA/NC

Posted by Tony-VA/NC on September 14, 2003 at 11:06:26:

Briton,

Selling the home and renting the dirt is (for me) like a “second retirement.” Right now you and I both are hands on and building more and more, long term income streams. There is no reason to turn a long term rental property into a short term income stream just yet. You and I both can maintain these rentals and make them last us for years to come.

When we no longer desire to rent the homes, then selling the home off and renting the land is “second retirement.”

Yes if you go to a bank and get financing for the land/home package, many times they are going to require that the title be eliminated. Even if they did not, chances are they are going to retain the title until the note is paid off (like a Lonnie deal). In either case, you would not have the title to transfer to your buyer at this time.

If you aquire homes creatively from the owners, then you may very well get them to release the title, especially on the older single wide homes sitting on land.

There are some great courses on the creative techniques of real estate (I have a favorite) for sale here. By adapting those techniques to the land/home deals you will have all the tools you need.

You already understand the mobile home business so the combination will put you into the driver’s seat of your own niche investment vehicle.

If you decide to try and flip these land/home deals, just be certain that your worst case scenario provides for a nice, positive cash flow from rental income. It can save your bacon, put money into your pocket and buy you time to find a buyer.

Tony

Briton, you ask a very good question… - Posted by Greg Meade

Posted by Greg Meade on September 14, 2003 at 08:28:13:

Briton

and all i can answer IMHO is that renting the dirt only is the panacea. I can walk you yhru my deal above. Got an improved lot for 8,026 after closing and first tried to rent the dirt only. wanted 30% ROI, so neede to rent for 200 per month for the 2400 per year yield. Ran ads in 4 papers, offered 500 spiffs to new dealers to place a home here, etc. and had lots of calls, but response was basically,why pay you 200 per month, when I can place in park with pool, clubhouse, weight room ,free mowing, water and sewer, and garbage,etc. for 150 per month? After 3 weks i was faced with the fact, this would not work for this piece of property.
Next, i explored placing a newer repo singlewide on lot and renting unit for 475 per month, cost of singlewide ( 95 Fleetwood 3/2) delivered and set up 8k. My new basis would be 16k in home and wanted the same 30% returnso needed a min rent fig of 400 per month.Having rentals here, figged rent at 500 per month, giving me 400 per month NET after taxes, insurance, etc. Almost went this route, but Briton i am burned out on rentals…wife and i want to visit grands, travel 4 month per year, etc. and i really don’t ever want to hear another lame ass excuse why i’m not being paid. exit strategy was tough on a s/w too, as you just can’t get the volume of dough on a s/w as you can on a d/w.
To make a long story short, decided to forego renting at all and place a nice 1996 Redmond 3/2 on lot and really dress it up. Had basis of 22,547 and sold for 60,000. 5k down 567.71 per month X 20 years. After closing, my basis was 17,547 and this dough was returning me 6812.52 or 38.8% cash on cash.
A lot with a beater s/w can be bought for 12-16k in undesirable neighborhoods here, usually 21-22k in nice neighborhoods. These homes will need work. Try and give us an idea what a lot (imoroved) in you r neck of the woods will cost.
I know too many MHP owners who are working very hard (and shouldering lots of risk) for very little cash flow after debt service. A motivated seller with his older home on land, can be a more profitable choice if the terms, price, etc. are in place.
The question i like from tony, is how many of these deals could i do if i did not have so much dough in each deal is a good one…a better one is where can i get the returns i do with less time and effort Until i can answer this, i will probably go on like i am…my accountant suggested i get 10k down for the package i’ll have ready the first, that will bump the cashon sash about…good enuf!

While your on the subject - Posted by Philip

Posted by Philip on September 14, 2003 at 13:20:44:

of land/home packages, I have a question.
How do you find them?
They are THE most sought after housing situation in my part of the world, volume wise.
They are never advertized. So, I was wondering what your farming sources were.
Just and ad?
I have been looking a little for some existing ones. I have a few I am putting on developed land that kinda fell in my lap. I just don’t see any source for finding them on occasion.
Philip

Re: Briton, you ask a very good question… - Posted by Chuck

Posted by Chuck on September 14, 2003 at 11:12:07:

The next step up is to let someone else do all of this hard work, and you buy the resulting note or a partial of it.

Re: Briton, you ask a very good question… - Posted by Tony-VA/NC

Posted by Tony-VA/NC on September 14, 2003 at 10:55:49:

Greg,

Sorry, I must have misread your original response as I understood it to say you were paying out those financing figures, but now I gather you were quoting the payment terms you receive when you owner financed the sale of the d/w and land.

I am not sure where you live but from reading this second post, your buy and sell numbers are in line with the numbers here in Western NC.

As mentioned, I like to find the older single wides on land with motivated sellers. These can often be purchased quite reasonably and with a little work can produce nice rental income streams. I realize not all investors are interested in renting these deals. I suppose I could argue that helps eliminate more of what little competition there is in this niche.

The double wide land/home packages in my area are not selling very well, which conversly has dramatically increased our ability to buy d/w land/home package foreclosures at better prices.

As the market fluctuates we buy when others can’t sell, we sell when others are buying but for the most part, I prefer to rent to even the keel.

Good post Greg,

Tony

Re: While your on the subject - Posted by Mike(Al)

Posted by Mike(Al) on September 15, 2003 at 01:09:23:

Philip,Here in Alabama most manufactured home dealers have started selling home/land packages.