Posted by Rikki on June 13, 2006 at 10:34:10:
Mike, are you referring to the gray one behind mine? The one with the M&H Homes sign in front of it? I hope not, as I am attempting to borrow against the one at Triangle to buy the gray one right behind it! If that is the one you are talking about, congratulations and I’ll have to e-mail you to find out some info. If it is not that one, where is the one you are referring to? Is it the one that was listed on Bertha Pyne?
Forclosure Rates Up Nationwide - Posted by Ruben (KCKS)
Posted by Ruben (KCKS) on June 11, 2006 at 20:46:13:
Just a general observation. I looked on RealtyTrac yesterday after reading an article in a local investors monthly newsletter. Forclosures in the first quarter of 2006 were up 72% from last year. Since the number of forclosures was 323,100 for Jan, Feb and Mar of 2006 I figured that last year at this time there was 187,850 forclosures. That means that this year we have seen an increase of 135,252 more foclosures. That is with less than a 1% increase mortage interest rates. In my back yard of MO forclosures are up 146%. I wonder what the forclosure picture will look like if we go up another 1% or 2% in the mortgage interest rate?
I was wondering what everyone out there is planning to do as the stick built housing market slows. Will you move into the stickbuilts? Do you think there will be even better deals in the mobile home industry? For you more seasoned investors could you please share your knowledge of investing as mortgage interest rates go up from your past experiences in the 90’s and 80’s. What would be some suggestions you make and what would you caution against if the mortgage interest rate continues to creep up?
Hope this topic spurs some healthy posting.
Ruben D. Flores
Re: Forclosure Rates Up Nationwide - Posted by Daphne Lowe
Posted by Daphne Lowe on June 14, 2006 at 13:40:18:
Foreclosures may rise, but I don’t think it will lead to widespread retail price corrections in SFR, with the possible exception of some hysterically high appreciation places (like coastal CA) or places with rampant investor speculation (like condos in Miami). But an increase in the supply of foreclosures combined with tightened lending standards could result in a large reductions in wholesale prices. That is what I think will happen. Auctions will return to being a place where experienced investors with expertise and capital can buy properties at profitable margins. Instead of calling a realtor, REO departments will return to catering to those investors who can solve their problems.
The bursting of the credit bubble will bring about the beginning of a new boom for MHPs. The pool of quality residents has shrunk as they were siphoned off into SFR purchases. When underwriting standards increase (and the insane loan products that put people into homes they can’t afford goes away) it will be harder for people to qualify for mortgages and affordability will decrease (also helped by increased interest rates), so MHPs will attract a larger and better clientele.
When the money supply tightens, those who have cash (or access to it) will dictate the rules. I am preparing for this by increasing my cash flow, continuing to focus on gaining expertise in my niche and by developing relationships with bankers and passive investors. Everyone wants to place their bets on the jockey who knows how to ride their horse to victory. When the crunch comes, I’ll have a proven track record and have gained the confidence of folks with capital.
When real estate isn’t the fad du jour and it returns to those who are in it because they love the game, it will be a blast. And that’s saying something because its a lot fun even now.
Daphne
I grew up building houses - Posted by John (TX)
Posted by John (TX) on June 13, 2006 at 08:01:25:
Fantastic observation, Ruben.
My family owned a home building company growing up and one thing I noticed year in and year out was that their were more players (i.e. realtors, appraisers, agents, etc.), more financing options, families got smaller, and people were willing to buy more house, with less money, and more risk.
I now do MH’s personally, and I believe “Appeal to the masses, dine with the classes”. MH’s always do well when the builders have built too much inventory. That’s why my father kept section 8 houses in his portfolio. To hedge his bets.
I think the storm that stick-builts are about to go through will mean good times for MH investors. Hang on Ruben, this wave is going to be fun.
John
Re: Forclosure Rates Up Nationwide - Posted by Rikki
Posted by Rikki on June 12, 2006 at 10:17:47:
Kind of on topic. A couple of weeks ago I posted that the local small banks loaned on rental properties, particularly doublewides on land, and that I had a loan application in with Heritage Bank. Well, after having to call the loan officer 3 times as he never called me back, I finally got in touch with him. His response was “Well, we (we being the Bank officers,etc.) had a big meeting about this recently and we’re not going to be able to do it. They said it was because of all the foreclosures happening.” So, all of the recent foreclosures have been an issue with Heritage Bank. I then went to BB&T and they said that going over the figures, they didn’t see a problem. I will let you know how that one turns out.
Re: Forclosure Rates Up Nationwide - Posted by Tony Colella
Posted by Tony Colella on June 12, 2006 at 01:55:37:
Ruben, great question.
I personally have always felt that the mobile home products follow the market because of their affordable housing price point but mabye even more so due to the stigma attached.
The national figure you quoted seems to have come and gone here in my market yet I know others (nationwide) who are still relishing in it.
What does that mean for me. Buy, hold, wait, prospect, cherry pick, and then attack.
Tony
Re: Forclosure Rates Up Nationwide - Posted by JeffB (MI)
Posted by JeffB (MI) on June 11, 2006 at 20:58:26:
Everyone will have their own opinion, but personally I’m planning to “double-down” on mobiles… that is, betting heavy in anticipation of an improvement in this slow market niche.
I spoke at length with Jim Clayton (what a great opportunity BTW) at the MHM conference and he feels we are headed for a slow but steady improvement in this industry… that all the data tracked by CMH indicates good times ahead for the MH industry. But regardless what the industry does, there’ll always be a need for the services we offer, so any upside that occurs beyond that is just a bonus.
SFH does not interest me personally… I’d rather do a ton of Lonnie deals and then get into commercial properties (either a MHP or retail shopping center). I figure if I’m not passionate about something (SFH) then it’s going to be more difficult to succeed…
Re: Forclosure Rates Up Nationwide - Posted by Tony Colella
Posted by Tony Colella on June 14, 2006 at 20:38:02:
Yeah, what she wrote!
(wish I could have written it that well).
Daphne expresses much of what Scott and I have been discussing for the past year or so. Thanks for putting it so well in writing.
Tony
Re: Forclosure Rates Up Nationwide - Posted by Mike/nc
Posted by Mike/nc on June 12, 2006 at 21:13:29:
Rikki, Wachovia in wilson will loan on DW/land. I was working with a lady that had been there 30 years and everything was going smooth. Then she retired and I got a new fellow that was scared to push the envelope. Still got the loan but was more of a hassell working with someone that didnt know all the ropes. By the way, I bought that little DW behind your’s over near Triangle service station…
Re: Forclosure Rates Up Nationwide - Posted by Sailor
Posted by Sailor on June 11, 2006 at 21:52:07:
I agree, Jeff. Interest rates continue to rise, while SFR values decrease. I like being the bank instead of paying the bank. I’ve been predicting for a long time that all those nutty loans are going to topple like a giant set of dominoes & it is going to take a L-O-N-G time for the industry to shake out & settle down. I feel better in bread & butter housing over which I have greater control. Oh, year, & there’s gonna be a whole BUNCH of folks w/bad credit needing a place to live. That’s one of the reasons I’m focusing on turning my mhp into a family place–
Tye