Dirk, you want it, you got it…(extremely long) - Posted by Karl (Oh)
Posted by Karl (Oh) on March 17, 2000 at 01:17:17:
I just got started in January, but I’ll tell you more than you care to know about my deals that I moved.
In two months of doing mobile home deals, I?ve moved three homes, and I?m having two more moved in the next couple weeks. I know everyone frowns on moving these, but I?m in a unique situation. One really nice park I?m working in has 450+ homes with a great manager who is bending over backwards to help me help him fill some empty spaces and sell some empty homes. The day I met him and pitched him on me working his park, he was thrilled and said he?d only charge me half lot rent on anything I bought or moved in. Yesterday I reminded him that we needed to square up on lot rent on several homes I?m selling, he said to forget about it, just keep selling homes. He?ll collect rent when the owner?s move in. Also, his parent company is in the process of buying three other parks in the area that he?ll eventually manage. So I?m doing everything I possibly can to keep this guy happy. Last Friday night he told me he?d be working late at the office, so I had Domino?s deliver him a pizza. (Good tip, Dirk). When I first started, I was trying to figure out ways to get around dealing with the PM, because a couple PM?s told me to take a hike. Now, I can?t imagine trying to do this business without the PM as a partner. Also, about half of the phone calls I get from my ?I buy, sell, finance? ad are people who want to live in the area where this park is located. I haven?t found any great deals FSBO right now in that park, and I?m finding wonderful deals in other parks that don?t want me around. This is why I?m moving so many homes. I?d rather not move any of them, cause it?s a pain, but right now the money seems to be in the move.
The first home I moved was a ?71 12X60 dealer trade-in in good shape sitting on wheels in the dealers back lot. The dealer called my ?wanted - 12X60 MH cheap to be moved? ad. I bought that for $700 and moved it for $1300 to my park. This one was moved on the Friday of the Convention in Atlanta. I met Dirk for the first time that day, and told him I was having one moved as we spoke, he asked if I had drained the water heater so it didn?t fall through the floor during the move. No I hadn?t, I was freaking all weekend that my trailer was all over the highway. Luckily it wasn?t.
That park has several narrow lots that will only fit a 12 footer, so they?ve let me move a couple older ones in. This is when I learned just how much work it is to have these moved. I hired the mover with the best reputation in town who supposedly has 30 years of experience. I quizzed him many times until he hated answering his phone about what was going to happen, how much everything was going to cost, what permits I needed, etc. Plus I was moving it from Indiana to Ohio, which added additional permit costs. After the mover blocked and leveled it and hooked up the utilities, I found out I needed to get a couple more permits from the local building dept and water and sewage dept, then get them to come out and inspect before turning on utilities. Then the skirting. Total moving cost was around $1800, several hours on the phone, and a week of stress. By the way, this mover was getting really tired of me until I told him Lonnie?s joke about the guy with the cell phone built into his hand. It was the funniest joke he ever heard. (I watched him tell that joke twice, both times he screwed it up, and nobody got it).
The second home I moved was a nice 1987 14X70 I bought for $4000. I found a cash buyer that agreed to pay $6500 (not a great yield, but I needed the cash). The home was in a hostile park, meaning the park manager was a jerk. The buyers wanted to live near my pet park. So I told them I could have it moved, if they bought the home from me first and paid the moving costs. So this one was a little more relaxing, because I had already made my profit. I didn?t make a lot on this, but I?m still learning.
The third one was a 1969 in great shape with a new furnace and new A/C that I bought for $700 because it had to be moved out of another park to make room for a new one. I could have probably bought it for less because the seller was out of time and had no other options, but she needed some money to get into an apartment. (A wonderful thing about this business ? it?s great when you can help someone out of a tough spot and still make a lot of money). The move cost me about $1500 because I did some of the work myself. I had to tear down the awning, and still have to put it back together. During the move the refrigerator rolled from the kitchen into the living room, but somehow didn’t fall over. From now on I’ll tie down all the appliances and pull out all of the cabinet drawers so there’s no damage. Yesterday I had a buyer call me at noon wanting a home, she had already been approved by the park, and at 1pm I sold her this one for $6000 with $2500 down. (The buyer wanted to give me $3000 down, but that was every penny she had, so I told her to keep $500 to buy some furniture. She gave me $2500 cash right there, and thanked me for being so generous and understanding). So I?ll finally get to create a note, all profit.
An hour after that, I bought one that I?m having moved next week. (I took yesterday afternoon off of work and got a lot done.) It?s a 1996 14X60 in perfect shape. My park manager agreed to pay for half the cost of the move if I bring it to his park. I negotiated a price of $10k with the seller, contingent on me helping her find an apartment. My favorite park manager also controls several apartment buildings, so I called him. The seller?s not working right now, so she offered to prepay one year?s rent if they let her move in. The seller had never paid property taxes on this home, so I took her downtown, paid $1600 in back taxes and put the title in my name, took her to the apartment and wrote a check for one years rent to the apartment manager, and gave her the difference of $2065 in cash. So the park manager gets a nice newer home in his park and gets one year?s apartment rent from a tenant, she gets to move into an apartment she likes and out of a park she hates, and I get the trailer. This should sell for $16-$17 in my market, I?ll cash out with my C credit broker. By the way, I brought a partner into this deal who fronted me the $10k for a share of the profit, so I have no money in this one, just my time.
The last one I plan on moving next month is a 1987 14X60 in great shape. The young couple trying to sell it had it listed for $8900 with a broker for two months. The seller called my ad right after firing the broker, and after 20 minutes of chit chat, offered it to me for the $1800 that?s owed on their loan, they just want out. The park it?s at is requiring that a new awning be installed when its sold (almost the cost of moving it!). It?s a Holiday Home park that?s kind of far away, so I?ll go meet the manager to see if I can work in that park, but I would rather just move the home instead of installing an awning. I showed my favorite park manager pictures of it today (digital cameras are very handy), he said he has the perfect lot for it. I?ll eventually have about $3500 into it, but should be able to sell for at least $8k or $9 on a note, maybe a little less if a cash buyer comes around.
So I’m getting really good at moving homes, still need to learn a lot more about marketing, creating notes, and putting my business plan together (Bob McN, please help, I’ll be coming up soon! Just need to find some time.)
I?ve had several emails recently from other folks asking me what I?m doing that?s getting buyer to call. Right now all I?m doing is running an ad in the local paper under Mobile Homes For Sale that says ?I buy, sell, finance uses mobile homes, affordable prices, several available, in this area/that area, my number?. I change this about once a week a little just to mix it up. I?m the only person in my city running this ad in the paper. I was planning on advertising each home in this paper for sale, but I haven?t had to yet. I?ve had enough buyers come along from this one ad to keep me busy. Also, the number on my business card and in my ad is to my cell phone that I always have with me. I work a full time job during the day, and I put the phone in my desk drawer and turn the ringer off, but check it every half an hour or so for messages. When I get one, I call them back right away, before they move on to someone else. That?s how I sold the home yesterday, by getting back to that buyer right away. Also, I chat up everyone I talk to like crazy, I try to find some common ground for friendly discussion to make them comfortable with me. By the time we?re done talking, they feel like I?m a friend that?s trying to help them out. One of my buyers just had a baby, she?s going to get a very nice card from me.
Sorry that this ended up being so long. Its 2am, and I?m wired from a busy day, and the busiest eight weeks of my life. Next week I?m going golfing in Georgia, I?ll try to relax then. Go UC!