Finished up my latest project this week. I own a construction company and try to keep 1 personal house or trailer remodel going at all times. We work on them in between jobs or when I’m not needed on a site I will go put in a few hours. This trailer is in a nasty little “end of the road” park where I already have a couple of rentals. The park owner has code enforcement on him about the abandoned trailers so he is tearing them down. I took this one for free with 3 months free lot rent. It had been fully stripped, no wire, no panel no plumbing, nothing left but a possum (RIP). $4615.87 and 2 months on and off (a day here and there, couple of days from one of my laborers) and here is the finished product.
http://s840.photobucket.com/albums/zz327/clintonallanbeck/?action=view¤t=lot17finishedproduct.mp4
I put ads on Craigslist Tues. for this trailer as well as a 2 br. Sect. 8 house I had open. I took 63 calls in 4 days, 48 for the trailer. Signed leases, picked up deposits and first months rent for both house and trailer yesterday afternoon. The park owner has another one he wants to give me, I told him let me think on it over the weekend.
Wow!
Thanks for posting this video and info. Very interesting.
To me, it illustrates how different markets can be. That trailer, in my market, MIGHT rent for $450. Lot rent, also is $450. So, zero cash flow for you (in my market).
Something with epoxy floors and spartan, but certainly livable, conditions would be tough to rent. Not so for you, apparently, based on your call volume.
Kudos on putting together a good ROI for your situation. Proof positive that a deal might work in one place, but not another.
Thanks for sharing.
Jeff
It made me laugh
I watched the video. Thanks for sharing.
I did chuckle a bit when the electrical panel was shown. The commentary indicated the prior one was stolen. In the next sentence is the statement that the one in the video was purchased from Craig’s List for $50. I wonder how many of the bargains on Craig’2 List are the stolen property from some other unit.
Great Job!
Just wanted to illustrate a point though. Did you do all the work, or does your 4500 cost INCLUDE labor? If you paid someone, and that is labor and materials, then not bad. However, I did something along these lines myself in November and gosh it was NOT worth it. I found myself spending so much on gas, labor, materials, and most importantly MY TIME. It got to the point that I got the same yields on my rehabs as I did on the junkers I bought and sold as is, BUT I spent probably well over 200 hours of time over at the 3 homes. So my question to you is, did you “pay yourself” for your time? Or did you actually work for a low hourly rate to get that income stream?
Looks good though, and sounds like you have a good market to do it in!
Since my satellite internet is about as fast as I am in the 40 yard dash, I was not able to watch the video but will try to view it from another location. Thanks for posting it.
I reading the responses I see some excellent wisdom and hope that you take them not as personal comments but as lessons we can all learn from. With that said I add some of my own,
Life and investing come in stages. Since the orginal poster has not yet had the chance to respond to the questions others have raised, my post only takes the questions and not the answers in consideration.
When first starting out I believe it is wise to do all the work ourselves so as to learn more about the product and the costs. In the first few homes we will have more money spent and probably not consider our labor costs. I say we consider the first few homes as “seminars” and our labor as the cost of participation.
It is wise to consider all costs in future deals however.
I have always been concerned about models that solely preach that we right checks and not swing hammers. There is nothing wrong with graduating to a point where you write checks but if you have not truly learned the product from the ground up you may be overpaying or working off of false assumptions. I also understand that if we never consider our labor then we are always working for free. “Pay yourself” first has always been my model but not always one I have been able to follow on every deal but one I have tried to follow on the portfolio as a whole.
Lastly, there is such a sense of satisfaction in knowing that you, with your own hands took a piece of scrap, junky mobile home and turned it into something that people will gladly pay money to live in.
Each market will vary on that condition and even within each market there are varying levels of acceptance. I have a rather standard model I shoot for but this does not mean that all of my homes are at that level.
Nice work and again, thanks for the video.
Tony Colella
I am definitely aware of the problem of stolen materials on Craigslist. I buy quite a bit from the site. That panel in particular was 1 of 2 I bought from an electrician off the site. He was changinig out electrical services for the pool house at an apartment complex so I am pretty sure they weren’t stolen.
As for my labor the cost reflects material only as I did the work during business hours while my crews were generating my income on other paid projects. A lot of the time I have to be on site, bags on to get the results we desire on our projects but there are also times on all projects when the revenue will remain the same whether I am on site or not. I use these opportunities to build a stream of income other than my ordinary income. I am going to be driving to and from job sites burning gas and wearing a tool belt whether I am on one of my personal projects or a client’s project. I can’t say what my hourly wage would be on a project like this because I don’t know how long I will rent it out. I still own 3 trailers I bought in 1999. They were about the same condition as this one was and I’ve had them rented out for 13 years now. The longer I have them the higher the wage earned for the work.
[QUOTE=Clinton;883528]I am definitely aware of the problem of stolen materials on Craigslist. I buy quite a bit from the site. That panel in particular was 1 of 2 I bought from an electrician off the site. He was changinig out electrical services for the pool house at an apartment complex so I am pretty sure they weren’t stolen.
As for my labor the cost reflects material only as I did the work during business hours while my crews were generating my income on other paid projects. A lot of the time I have to be on site, bags on to get the results we desire on our projects but there are also times on all projects when the revenue will remain the same whether I am on site or not. I use these opportunities to build a stream of income other than my ordinary income. I am going to be driving to and from job sites burning gas and wearing a tool belt whether I am on one of my personal projects or a client’s project. I can’t say what my hourly wage would be on a project like this because I don’t know how long I will rent it out. I still own 3 trailers I bought in 1999. They were about the same condition as this one was and I’ve had them rented out for 13 years now. The longer I have them the higher the wage earned for the work.[/QUOTE]
Another tool belt wearing, mobile home landlord… brings a tear to my eye.
Welcome to the gang!
Tony
As Clinton more or less highlighted, you have a certain amount of time. You can invest it or you can waste it.
I am all for knowing what your time is worth. As Tony highlighted, the time can be invested in learning even if you do not make real money immediately. What you learn can earn you money multiple times in the future and save you from some bad decisions.
For some, wearing a tool belt is also a hobby. Rather than watching football or drinking with friends, they like to have tools in their hands. They are planting seeds that they will harvest later.
It would be good to know how much a project takes in time and materials vs. how much a project produces in rent or capital value when sold. Some of the time it just is not worth tracking if the project is better than sitting around the house with the TV playing
The only reason I brought up the time issue was because I wasted SO much time on a rehab project a few months back and I really wish I hadn’t. I now have more money tied up in 3 homes than in my other 6 homes that I have notes on combined, AND I spent tons of time over there, AND the yields are smaller. Did I learn a lot of valuable lessons like Tony mentioned, YES! However, would I take on another rehab bundle, probably not. I just value my time way too much and I think it’s super important to maximize your hourly rate in any field. If I had not done those 3 rehabs, I would have been able to do 4-6 deals during that time with that time and money, all of which would have higher returns.
I guess in Clinton’s case though, it is so hard to determine his ROI because they are open ended rentals. Mine are typical LD’s, so I can get a pretty good idea of my stats. You know what they say though, “different strokes for different folks.” 
Clinton I hope that place rents for 20 years to come. Good job!
[QUOTE=John_Corey;883532]As Clinton more or less highlighted, you have a certain amount of time. You can invest it or you can waste it.
I am all for knowing what your time is worth. As Tony highlighted, the time can be invested in learning even if you do not make real money immediately. What you learn can earn you money multiple times in the future and save you from some bad decisions.
For some, wearing a tool belt is also a hobby. Rather than watching football or drinking with friends, they like to have tools in their hands. They are planting seeds that they will harvest later.
It would be good to know how much a project takes in time and materials vs. how much a project produces in rent or capital value when sold. Some of the time it just is not worth tracking if the project is better than sitting around the house with the TV playing[/QUOTE]
+1
This is a pretty awesome post and sums up thoughts ive had myself. While I do hire out a lot of the work that I dont have the skills for I do enjoying do the things that I am comfortable with more so than just screwing off at home.
[QUOTE=John_Corey;883532]As Clinton more or less highlighted, you have a certain amount of time. You can invest it or you can waste it.
I am all for knowing what your time is worth. As Tony highlighted, the time can be invested in learning even if you do not make real money immediately. What you learn can earn you money multiple times in the future and save you from some bad decisions.
For some, wearing a tool belt is also a hobby. Rather than watching football or drinking with friends, they like to have tools in their hands. They are planting seeds that they will harvest later.
It would be good to know how much a project takes in time and materials vs. how much a project produces in rent or capital value when sold. Some of the time it just is not worth tracking if the project is better than sitting around the house with the TV playing[/QUOTE]
I too think this post is spot on.
If we think of all the time we waste doing nothing around the house and choose to use that time doing some phsyical labor on an investment property that creates an income stream, do we really worry too much about our pay rate for that labor?
Don’t get me wrong, I understand that if you build a business without accounting for your labor or time you can get yourself in trouble but at the “hobby” level I don’t think it is too much to concern yourself with. Now if you are going to go from hobby to full time investor that will of course have to change.
If you have money coming in from other sources and want to spend a weekend or some off work hours creating a little money machine out of a mobile home then please do so. I have always believed that the rewards for turning a junky trailer into a nice, marketable home is good for both the body and mind. The sense of satisfaction, the lessons learned, the time spent more productively than watching TV are great rewards and when you see that home start to produce an income stream that lasts for years into the future you know you are onto something.
Again there are two models here, hobby and full time.
In between them is perhaps the part time investor model which is the one I think most everyone could begin and create a debt free retirement business in 10 to 15 years that would provide for their family and take very little time to manage (but I digress).
Sometimes it is just good to fill down time with productive efforts and enjoy that for what it is worth. Use the cashflow as lessons to your children as to how hard work today can provide for you well into the future. Teach them both the hands on skills (that seem so rare to most men these days) and the financial skills that can provide for them or at least plant the seed of their own businesses.
Even is your children don’t choose to invest or work in manual labor positions, if they have a few hands on skills they may find that they enjoy working on their own homes, have the self-confidence to do so and not only save money but find a “hobby” that keeps them off the couch.
Tony
[QUOTE=Clinton;883490]Finished up my latest project this week. I own a construction company and try to keep 1 personal house or trailer remodel going at all times. We work on them in between jobs or when I’m not needed on a site I will go put in a few hours. This trailer is in a nasty little “end of the road” park where I already have a couple of rentals. The park owner has code enforcement on him about the abandoned trailers so he is tearing them down. I took this one for free with 3 months free lot rent. It had been fully stripped, no wire, no panel no plumbing, nothing left but a possum (RIP). $4615.87 and 2 months on and off (a day here and there, couple of days from one of my laborers) and here is the finished product.
http://s840.photobucket.com/albums/zz327/clintonallanbeck/?action=view¤t=lot17finishedproduct.mp4
I put ads on Craigslist Tues. for this trailer as well as a 2 br. Sect. 8 house I had open. I took 63 calls in 4 days, 48 for the trailer. Signed leases, picked up deposits and first months rent for both house and trailer yesterday afternoon. The park owner has another one he wants to give me, I told him let me think on it over the weekend.[/QUOTE]
Clinton,
Have you ever tried the epoxy floor on a slab house ? Wondering if it holds up as well. I have a rental I’m thinking about trying it on. I guess the hardest part would be securing the ply to the concrete. You thoughts ?
Keith
The epoxy is made to go over concrete floors so I wouldn’t use plywood at all. The slab has to be really clean (no old carpet glue or VCT residue) or the epoxy won’t stick. I have a couple of slab houses and when we got ready to do flooring the slab was covered with old glue and VCT remnants. We did cheap ceramic tile through the whole house on a thick mud bed. 6 years no (flooring related) issues.
Clinton
[QUOTE=JeffB (MI);883509]Wow!
Thanks for posting this video and info. Very interesting.
To me, it illustrates how different markets can be. That trailer, in my market, MIGHT rent for $450. Lot rent, also is $450. So, zero cash flow for you (in my market).
Kudos on putting together a good ROI for your situation. Proof positive that a deal might work in one place, but not another.
Thanks for sharing.
Jeff[/QUOTE]
Jeff here is an adjunct for your thought:
I have been searching for an affordable park in my area, and have come across a number of parks with multiple empties. One park has 38 out of 100 empties, another has 12 out of 60 empties, and another has 8 out of 30 empties and the last one has 9 out of 60 empties.
I am in the same area as all of these other parks with around 130 spaces and no empties. (except two that have size limitation and infrastructure issues) These parks are probably owned by people that have bought their parks and they barely have cash flow and so have no money to install and give away trailers which is the way it works when the space rent is as high as the rental house market as you described.
The space rents are so high here that the house and the land together barely are worth more than the space rent alone is and certainly when you figure in missed payments, and move out-abandonment issues. The owners are so backward on the cash flow or for other reasons they can’t or won’t put in the 10 grand each or more per house to fill them using contractors so the spaces will remain empty.
I have no inclination to fill another mans park because in my opinion these deals are not worth the payoff when compared to owning the land as well, but I also realize it is a real benefit to the park owner to have the space filled. Any owner with an empty space that is not going to reasonably get filled by his own ingenuity and money will recognize the benefit of offering a trusty worthy type Lonnie dealer installer, and offer a payoff incentive to fill his park on the other guy’s dime.
So seek out places with empty spaces, find the owner (as apposed to the manager whose job it is to protect him from the tenants) and explain your plan. You will fill a space with “such and such a trailer” and show him pictures of the last job, and the projected trailer and business plan, offer that you will sell it to a customer approved by the park for x down and x a month till paid off. Most parks owners will give you an incentive equal to 1.5-2 years of free rent. At $450 per month times 24 months you have $10,800.
You offer the park a 7 year promise to keep the trailer in the park unless it gets destroyed and just have the prospective tenant agree to that provision.
And make the deal so that the incentive is that the whole thing gets extended for the amount of the time the trailer is empty between sales.
(meaning that you are responsible to get the tenant out, and for the rent until he gets out, but after that the rent stops until you resell it)
You collect the space rent for your trouble and can basically get your money out of the value of the rent and down payment, in the process you can avoid the safe act as well since you are only collecting space rent! (the down payment if you get one is the cream on the pie) and start making real money while filling the other guys park, at no cost to the other guy. If trust is not an issue you simply could not lose, neither could the customer or the park owner.
When all concerned parties win you have a great business plan.
Edited to add “do your own due diligence on this idea”