Lessons re-learned - Posted by Rich(WI)
Posted by Rich(WI) on May 13, 2007 at 16:33:10:
I bought an older mobile home from the park owner in December for back lot rent.
Lesson #1. Never buy a mobile home, in a Northern climate, that has not been properly winterized unless you get an extremely good price and some free lot rent while you do necessary repairs. Two months of free lot rent seemed fair. I had to pay heat and electric during this time.
Lesson #2. Never hire a good friend who is a contractor to do your repairs. Three to four days of repairs turned into a two month nightmare. I kept a friend, but I will never hire him for anything major again. We had to re-plumb the home with PEX, replace one toilet, replace the hot water heater, some sub-flooring and all the carpeting/floor tiles. The only way I got him moving at all was to tell him I had it sold. I let my friend/contractor run my job. Never again. His saving me money cost me.
Lesson #3. No good deed shall go unpunished. My neighbor wanted to put her son and his future wife into my unit. We agreed and I let the kids move in. I did not have mom cosign. Two months later I go to mom, Kids have to go. No payment, no intentions of payment. She gets the kids out (I was lucky here, I didn?t have to do a repo through the legal system.) I got the unit back clean and in broom swept condition.
Lesson #4. Always check on future tenants. Run criminal background and credit checks. My first phone call from a new prospective tenant turned out to be interesting. In my state the court system has records available on line for free. This individual has 21 court appearances in the last two years. 19 of those are for non-payment of bills. I think his problem will not become my problem.
Lesson #5. I will still make money on my investment because I bought right. This unit will cash flow at least $300 a month after expenses. I will have my investment back in one year.
They call it education for a reason. If I had remembered my education I would not have had 4 months with no income (I did get one months lot rent from mom because she felt bad).
Yes, I am sitting in the corner with my Dunce hat on. Oh well, On to the next money maker!! I won’t forget these lessons any time soon.
See folks, you can GOTC, make mistakes and still make money!