Hi Everyone & Happy New Year - Posted by DougO(NM)

Real Estate Investing Mobile Homes & Mobile Home Parks
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Posted by JHyre in Ohio on January 11, 2001 at 11:27:22:

I LOVE examples- cause then you know EXACTLY what has been and can be done. I just started looking at doing newer 3BR homes (1989+) because they attract better payors in nicer parks with bigger downs…after a million December repos on my 2BR junkers (What IS it with low-income types and Christmas spending in lieu of little details, like a place to live?).

Just put in a bid of $12,000 to Greenpoint on 4 homes- 2 that I really want and two others that they really want to get rid of. The repo manager said that corporate would VERY likely accept the bid…I should’ve bid lower! To wit:

#1 1994 14x80 3BR in an EXCELLENT park. Homes in this park start at $15,000 cash, area is very prosperous and homes do not stay empty for long. In the last few days this home has suffered water damage- it is otherwise PERFECT. Should sell for $25,000 to $29,000 cash in this park…I’ve seen 'em sell for more, but I’ll take FAST money over the LAST money any day. I figure repairs, lot rent, etc. will be about $2,000 for this deal. I’ve allocated $7,000 of purchase price to this one.

1985 2BR in the same park, in very good shape except for recent water damage (Smell a pattern?). I figure $2000 in expenses, allocated $3000 purchase price, should FAST sell for around $12,000 cash…this park only takes people with good credit and lots of people want in AND their lot rent is< $200 per month! Already have a possible “as is” buyer (our fixer-upper guy really likes this school district) for $10,000 cash.

#3 is in a 1,000 lot Toledo park that was hard to sell in last year…managers and sales people were ALL fired a few months ago (quite deservedly, I might add) and the new regime is begging me to give them another shot (I was so disgusted with previous managers that I quit doing business there). It helps that I do business in 3 other parks owned by the same company 90 miles south of Toledo…the managers there are very good and the head of the corporation (30+ large parks) knows me now. I’m getting the same perks (and more) that I receive in the southern parks- manager referals & cooperation, $1500 cash + no lot rent for homes that I move into the park and pay 1/2 rent on homes already in the park (the latter perk does not apply in the southern parks). So I’ll give it a shot. Bought a 3BR 1977 with attached garage and 2 add-on rooms (appear to be usable as BR’s, so I’d have a 5BR singlewide!). Messy, but in OK shape, should require $2000 in fix-up. Nice car left in the garage, I’ll have to find the bank that financed it and get a finders fee. Figure this one will sell for $1500 down and a note for $8,250.

Last home is in a decent Toledo park, 3BR 1982 14x70. Figure on moving it 90 miles south to the other parks. 3BRs sell fast there and it makes my managers look good. Net $700 move ($2200 for move, set-up, etc, less $1500 check from the park), $2,000 fix-up, should sell for $1500 down, $12,500 note.

So, anticipate $22,200 in, $41,500 cash out + $20,750 in notes. Of course, the plans of mice and men…

I’d like to get more of the newer 3BR’s (seeing as how I currently have ALOT of old, newly repo’ed 2BR’s) in the nicer parks for notes and cash. I’ll keep you posted, pun intended!

John Hyre

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Hi Everyone & Happy New Year - Posted by DougO(NM)

Posted by DougO(NM) on January 07, 2001 at 17:12:58:

Hi everyone, happy new year. Haven’t been here in awhile, though I have lurked a few times! Ana (my wife & partner) and I have been busy hanging out in Mexico, buying & selling some properties, managing our rentals, and after a hiatus of several years, have also managed to squeeze in at least two MH deals each month. (I also taught a Basic Investing Class a few times and had a ball!) (Of course all this comes in between settling the fights between our 4 & 5 yr old!) I would like to do more, but am content at this pace, owing to other commitments I have made. I guess we’ve been very fortunate, and want to be sure to remind all of you that may have just started, it doesn’t take very much doing, as long as you do SOMETHING, (other than what everyone else does, nothing) I realize every market is different, but it really does come down to just working your numbers. For example, I was thinking the other night about our average numbers over the last year, and just selling 2 MH’s per month (sometimes we could do more) for 36 months, we’ll create over $1,000,000 of paper. ( Our average note these days is $15,000 at 72 months) We are mostly buying and selling early to mid '90’s repos from lenders, setting them up, fixing them up and selling them turn-key. We have even managed to keep our down payments in the 20-30% range, so will see what that does to the repo rate. (Big kudos to David Butler, as I really enjoyed your book, even though, as I told you, don’t think much of the name! )
Best of luck to everyone this year from your Amigo’s in NM!

Doug

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Re: Hi Everyone & Happy New Year - Posted by Earl

Posted by Earl on January 09, 2001 at 14:46:18:

David, can you give examples of your total costs on avg. per deal. For example what do you pay for mh and is it set or do you have to move it to a lot. Do you develop lots, etc…

Thanks,

Earl

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deal #'s - Posted by DougO(NM)

Posted by DougO(NM) on January 09, 2001 at 16:30:26:

The most we’ve paid lately for a home was about $9,500, it was set in place. Most of them have to be moved and set-up, so we have to buy pretty reasonable to start with. We work in a market where the older houses that come up for sale must usually be moved, so this modus operandi is necessary. Here is what we might consider a typical deal:
House: $7,500 Move & Set:$750 - $1,500 (depends on amount of work involved, axles, etc.) Skirting:$400 Install Deck/Skirting/Water/Elec/Sewer/Gas:$1,500
Fridge&Stove:$600 Cooler:$700 New Carpet/Lino:$1,000
Misc:$800 Total Costs ~$14,000. These homes are normally 1990 + 16x80’s and will usually book and retail for $20K+, w/wholesale values (based on 70% of retail) of around $15K. We will sell for a little “back of book” and require at lest 20% down, and will let this be made in payments. For example, they have $4K down and I need $5K. We let them make 4 pmts of $250, and write the note as if thy’ve already made them. So we end up with less than $10K in any one deal. Our terms are 15% and up to 10 years, with monthly payments of around $300. Everything is done through an escrow company, which works nice for us as well as the buyer. (They can use the pmt history to help establish or re-establish credit) We have also developed, and re-developed lots, though not as many as I’d like lately.
Hope this helps
Doug