Newbe - Posted by Diane Hessin

Posted by Diane Hessin on September 28, 2003 at 22:25:20:

The Seller will take 259,000.00 for both parks this is less than the
parks individually. Priced individually the parks are 275,000.00.

Also the sellers motivation is two fold
1.)the other parks he owns are close to his home and don’t really
take much to maintain. These two parks are farhter away and he
says his other business has grown to the point that he doesn’t
really have time to deal with them.
2.) Originally he wanted to sell the parks in order to purchase the
condo without having to take out a 2nd mortgage. Now he already
has the 2nd mortgage, so he may be willing to finance more of it.

The question is the park worth what he is asking for it? And what
is the best way to try to structure the deal. I don’t really have
cash to put down.

I have also learned that most of the tenets (all but 2 or 3) have
been there since he purchased the parks in June of 2000.

Thanks again for your input.
you all are awsome.

Newbe - Posted by Diane Hessin

Posted by Diane Hessin on September 27, 2003 at 09:52:30:

Hi everybody, I found this website about a week ago. You all are
awsome I have been amazed at the exchange of information and
mentoring that goes on here. It kind of restores my faith in humankind.

I intially found this forum and site looking for a mobile home. I am
currently renting a condo from a friend but it is involved in a lawsuite,
(the friend is sueing the condo association) the suit is expected to settle
soon and I will have to move. I need to reduce my monthly expenses
and figured the only way to do this is to rent a mobile home, well I found
this site and I thought If I need to get a mobile home would I rather pay
retail or wholesale. Well the story goes on from there. This may be the
answer I have been looking for.

My thinking now is If I could come up with a couple of thousand dollars
to buy a mobile home to live in by cutting out all unnecessary expenses
and spending. Then save the money I would otherwise be paying on rent
keep spending under controll and reinvest in more mobile homes to rent
out,

Does that seem logical and resonable?

I have ordered, recieved and read Lonnies book Deals on Wheels.
Received it yesterday afternoon and finished reading it about midnight.
I had take time out to feed my family. Why do they need to eat anyway!

I have also read all the articles on Mobile homes, all the posting on the
board currently and some of the archives. As well a quite a few articles
on the other boards.

I am in North Carolina, while I was waiting for Lonnies book I bought a
paper last Sunday and checked out the real estate section for mobile
homes, and lots. There wasn’t a lot listed but there were a few, most
seem to be listed by dealers or investors. I do realize I will probably find
more cruising the parks in the area. This has not yet been available for
me to do.

Now I need advise, in today’s paper I almost missed this ad, it seems the
ads for mobile homes and lots are the same ones that were in last
Saturday’s paper the one I almost missed is listed under investment
property, 2 mobile home parks $259,000 for both. I realize I need to
check these out. Can you all advise me on how to proceed. I have read
so much that I am on brain overload I don’t think I should just let this
opportunity pass me by just because I am not quite ready for it. Any
advise on how to proceed.

Please email me at dhessin@bellsouth.net or post any replies here. I
would appreciate any advise you all can give me on how to proceed>

Thanks so much for your time and any advise you can give.

DianeH-NC

using your figs… - Posted by Greg Meade

Posted by Greg Meade on September 30, 2003 at 13:58:52:

these are both viable parks with 10 and 12%caps respectively. Lets take park # 1 and see if we can’t structure more bang into our buck. Wee nned to increase rents at once…140 per month does not seem like enough money for the work and expense and liability one has to provide a nice lot for someone else! Lets fig 175 X11 spaces X 12 mos = 23,100. plus bring in a small mobile or two for rent on empty lots =350 per mo X 2 X12mos=8400 equals 35k revenue. For yucks lets fig 30% expenses (10.5k)= 24.5k NOI. With an asking price of 110,000 this gives us 22% return. Not bad, but you still need to have 6-8k to bring these 2 small mobiles in. Why not take 10k from asking price for this purpose. Pencils in for me then. You say you don’t have 100k to invest in this venture? how about a master lease with Option?


There are some real savvy no money out of pocket type of investor on this board…possibly one of them have an idea. I have not had much luck with this type of thing! good luck!

News flash: Newbie about to step on land mine - Posted by Dr. Craig Whisler CA NV

Posted by Dr. Craig Whisler CA NV on September 27, 2003 at 12:18:51:

Diane, there is an old saying:

There be many a slip betwixt the cup and the lip.

Mobile home parks are much more complicated than one might think at first glance.

To procced ANY further without reading Ray Alcorn’s stuff is like buying a car with no motor, because it gets such good gas mileage.

With Mr. Alcorn’s material it will be like ‘painting by number’. Now even I can be an artist.

You’ve got your hear on straight now. You may have found a great opportunity, but how do you evaluate it?

Ray is the way.

Regards, doc

Re: Newbe - Posted by Diane Hessin

Posted by Diane Hessin on September 27, 2003 at 10:35:00:

A follow up to my post.

I have tried to contact the seller and no one was home. I left a
message. I know I need more information. Most important I think
is seller motivation why is he selling. In addition I know I need to
know
how many lots are in each park?
Are there any park owned lots?
What the rent rate is?
What are the expenses?
What is the street address of the park so I can go by and look at
it?

Are there any more questions I should ask when I get ahold of this
seller. I know I need to listen carefully to learn about his situation
and motivation. Any other advise would be appreciated.

Thanks
Diane

Re: News flash: Newbie about to step on land mine - Posted by Diane Hessin

Posted by Diane Hessin on September 29, 2003 at 12:49:10:

Hi Doc,

Thanks for your advice I will obtain and read Mr. Alcorn’s book as
soon as possible.
I have posted more information on this deal and I thought while I
was waiting to aquire the book I could play with the numbers and
see what I come up with. This financial stuff is very new to me as
far as figuring ROI and CAP rates. It is much earsier for me to
learn with actual numbers rather than suppositions.

I have enjoyed reading your posts, and I appreciate your wit.

God Bless
DianeH(NC)

Re: Newbe - Posted by Lyal

Posted by Lyal on September 27, 2003 at 11:11:12:

Diane,
Great to see you jumping in. In answer to the question in your first post. Yep it is completely logical and rational. You have a good plan laid out. Cut expenses (and keep them under control) and invest in assets that will pay you (as opposed to sucking your wallet dry like the new car or big screen TV bought on credit).
If you haven’t already, you might want to check into Robert Kiyosaki’s book; Rich Dad / Poor Dad. Excellent explanation of why so many people today live hand to mouth.
Read Lonnie’s book again also. You’d be surprised what you pick up when you go through it again. Remember, the first person to talk to in any park is the manager. They’ll know more about what homes are for sale and average selling prices than anyone. Check the archives for approaches to them that will get them on your side as far as buying in their park (search for “approaching park managers” and variations).
Here are some pointers to info on evaluating mobile home parks.






All the best, Lyal

say diane, sounds like … - Posted by Greg Meade

Posted by Greg Meade on September 27, 2003 at 15:20:29:

this could be interesting for you! Try to get a current p&l and post the highlites here. There are very many very savvy folks here (ernest tew himself) that can tell at a glance if it is a winner or not!
do not for a moment think that there are not some wonderful parks that can be picked up for a song (or better still,very little down). move slow and good luck!

More Info - Posted by Diane Hessin

Posted by Diane Hessin on September 28, 2003 at 15:22:37:

Hi,

I now have more information on the two parks for sale. I would
like to post the numbers and ask for feed back. Is this deal worth
pusuing further.

Park 1
11 Lots Rent 140.00 Month 10 rented 1 currently vacant
There is one additional lot that is small the owners have never
tried to rent it but it could accomodate a small mobile home.
Potential income 1,540.00/month 18,400.00/annual
Current Income 1,400.00/month 16,800.00/annual

Expenses
Waste Management Average 136.00/mo
County averages 140.00/mo
Security Lights 23.00/mo
Taxes 218.12/annual
Insurance owners currently insure 4 parks for 688.00 anually. For
estimation purposes I am going to figure the insurance and
250.00 annualy,

These figures give me

Income 1,540.00/Month 18,480.00/Annual

Expense

Wast Management 136.00/Month 1,632.00/Annual
County 140.00/Month 1,680.00/annual
Lightling 23.00/Month 276.00/Annual
Insurance 20.83/Month 250.00/Annual
Taxes 18.18/Month 218.12/Annual

Total Expenses 338.01/Month 4,056.12/Annual

I understand we need to reduce the income to account for
vacancies. I figure if we count on 2 vacancies that would reduce
the monthly income from 1,540.00 to 1,260.00 and the annual
income to 15,120.00 The expenses are 4,056.12 which leaves
11,063.88. The asking price for the park is 110,000.00 Is it
worth it?

Park 2
A total 14 Lots Plus a small house, one park owned mobile home
resides on one of the lots. The park owned home rents for
350.00 per month, 11 lots are occupied and rent for 165.00 per
month 2 lots are currently vacant.

Potential Income
House 295.00/Month 3,540.00/Annual
Mobile Home 350.00/month 4,200.00/Annual
13 Lots @ 165.00/Month 2,145.00/Month 25,740.00/Annua

This makes a potential monthly income of 2,790.00 However 2 of
the lots are empty so the monthly in come is 2,460.00 for an
annual income of 29,520.00

Expenses are

City (Water, Sewer and Trash) 550.00/month 6,600.00/Annual
Insurance 20.83/Month 250.00/Annual
Taxes 200.00/month 2,400.00/Annual

Total Expenses 770.83/Month 9,250.00/Annual
Currently the owners of this park pay the sanitation fee however
they state that can be passed on to the tenants currently 13.61/
home. The figures above include the park paying the fee.

Ok so the income from this park is 29,520.00 and expenses are
9,250.00. The asking price is 165,000.00.

Is this worth pursuing? I am a newbe I don’t yet understand all the
functions of the financial calculator. These parks are located 30
and 60 miles away from my home. If you all think it is worth
pursuing I will be happy to go check them out see what kind of
condition they are in and get more information. Please give me
your input.
Thanks
DianeH/NC

Need selling terms, also - Posted by Dave Swett

Posted by Dave Swett on September 28, 2003 at 16:23:01:

The terms of sale and motivation of seller are also very important.

The deal can run from all cash to seller to a dollar down and a dollar a week. So make one more phone call to get the terms and try to feel around to find out the seller’s motivation or reason for making the sale.

Good luck,
DJ

Terms - Posted by Diane Hessin

Posted by Diane Hessin on September 28, 2003 at 19:51:51:

Ok now I have the requested terms and the seller motivation.

The seller is purchasing a condo and has had to take out a 2nd
mortage on his home to pay for it. He needs $150,000. cash and
is willing to finance the rest. He said at whatever the commercial
interest rate is and he is willing to finance it over 10-15 Years.

So where does this leave us? Is it worth further investigation.

Thanks
Diane