Should I buy Tony's book? - Posted by Tim Donahue

Real Estate Investing Mobile Homes & Mobile Home Parks
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Posted by Anne_ND on May 04, 2007 at 17:00:58:

Ryan,

The answer to this depends on your goals.

In my case, I want to have as many notes going at once that a single person can handle. I don’t want employees, I want a system that is streamlined and brings in checks every month with little or no hassle.

Selling MHs can be expensive (repairs, utilities, bribes for the PM, etc) and it’s time-consuming and necessitates speaking to any number of felons and deadbeats before I find the kind of person that I want in my homes- hardworking, maybe a history of late payments, but a deserving person or family that needs a clean and safe place to live. [And I don’t mean to be a jerk about the people who call on my ads, but I have talked to a whole bunch of people who want to know if I will sell to sex offenders, or who want the home to be listed in their spouse’s name because they are hiding from child support and don’t want to have any assets.]

When I had 5 Lonnie deals, this was not a problem, but in scaling up, I have more potential vacancies, and more homes that need to be filled. By enlisting the current payor to find the new buyer, I save myself time, AND I get that assignment fee, which is a nice “pop” every few months.

It’s also true that if I have no homes for sale, but a few buyers on my list, then I’ll be glad to let a payor give back a home and resell to a new buyer. But it always seems like I get all the homes back at the same time, at the worst possible time (that would be October in ND- start of the cold season when no one wants to buy an older MH, and the utilities are going to kill me). So even one home with an assignment is a big help.

So, you are not missing anything, you’re right that you can sometimes make more money when you take a home back and sell again, but for me that’s not always the best course. And don’t forget that assignment fee- that really does cut into any “losses” from not starting the clock at “0” again.

HTH,

Anne

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Should I buy Tony’s book? - Posted by Tim Donahue

Posted by Tim Donahue on April 29, 2007 at 18:15:53:

Hello Tony and all,

Mainly, I am writing to inquire about Tony’s book, Investing in Mobile Homes with Land. Frankly, at $97, the book is pretty expensive and I am debating whether I want to purchase it. I have read the summary of the book online, and it seems to address a lot of topics that are beyond what I am trying to do. It seems to be just about the only book around, however, that addresses owning MHs on land to generate rental income. I have bought and read both of Lonnie’s books and found them very educational, but they don’t deal with this subject.

I live in TX and have a full time job. I also own an S Corporation that builds spec homes in southern GA in partnership with my father in law. He lives in southern GA.

My main investment objective is generating asset producing income. While I continue to work my full time job, I want to channel all the profit from my spec home business into MH/land assets in southern GA that will then generate rental income for me. I want to purchase a number of doublewide MHs, each on at least 1 acre of land, and rent them out for steady monthly income. There are many like this in southern GA. At some point, I want to quit my job in TX, and move my family to southern GA and manage my MH/land assets.

My main concern is that, when I crunch all the numbers, the monthly income from a “standard deal” is not that impressive, even if I pay cash for the property.

I contemplated holding on to some spec homes that I built as rental property, but the ROI on those is even worse. I can generate just about the same rent from a MH with land and only pay half the price for the asset. My father in law owns several MHs on land in southern GA and recommended that I look into it.

From what I have seen, a “standard deal” in southern GA looks something like this:

3/2 double wide on 1 acre
$40k selling price
$500 monthly rent income
$38 monthly property tax cost
$42 monthly insurance cost
$50 property management cost ( I live in TX and don’t think I can manage a property in GA)
$370 monthly GROSS income, if I pay cash for the property and hold no mortgage (This number is BEFORE any income tax, vacancy costs, repair costs, etc. so will realistically be significantly less than this.)

What am I missing? Assuming that I could keep all $370, I am still tying up $40k to make $370 per month in income (around 11% ROI).

If I decided to put 50% down on each property, then I am looking at a $185 mortgage payment (at 7.5% for 15 years), which drops my monthly gross income to $185. This is assuming I could even get a mortgage, because most banks told me they require the MH be on a permanent foundation for them to give you a mortgage.

So, it seems that I need to purchase these MHs much cheaper than the standard $40k asking price (maybe through foreclosures?) And, I would need to own a lot of them to generate enough money where I could quit my full time job and live off the income.

Anyway, what am I missing here? Will Tony’s book help clarify what I need to do to make these deals more lucrative?

Sorry for the long post. Thank you in advance for any responses.

Best regards,

Tim

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Re: Should I buy Tony’s book? - Posted by Tim Donahue

Posted by Tim Donahue on May 06, 2007 at 14:58:43:

Well, I purchased the book yesterday and am looking forward to reading it.

Thank you to all who responded.

Best regards,

Tim

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Re: Should I buy Tony’s book? - Posted by Marty (MO)

Posted by Marty (MO) on April 30, 2007 at 23:49:07:

While you’re shopping, make sure you have DOW and track down Ernest
Tew’s material, also.

You’ll be able to skin mobile homes in ways you never would’ve imagined!

What bank’s doing 7.5% on mobiles?

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Of course you should, it will … - Posted by Greg Meade

Posted by Greg Meade on April 30, 2007 at 18:19:12:

cost too much not to! My step son bought this book that tony and scott wrote about 1 year ago, and I read it before he did!!

I am currently working on L/H’s 73,74, and 75 as we speak and had completed 50 plus when I read it. it was full of good stuff. Well thought out, and I love the Landbank approach. It was written from the working man approach which suits me fine (I am a working man!)A lot of what is written in the book I had to learn the hard (expensive) way.

I have gotten better at these packages as time goes by, as will you. The more info you have going in the more profit you will realize at exit.

The books advertised here were not written (at great time expense) to make a huge profit, they were written to share knowledge and avoid costly mistakes.

97 dollars is a very small price for the experiences shared. How much does even a small mistake cost in your market?

Regards,
Greg

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Re: Should I buy Tony’s book? - Posted by ColeHaynes

Posted by ColeHaynes on April 30, 2007 at 09:59:12:

Tim,

I purchased tony’s book about a year ago, along with Lonnie’s books, when I first started looking into investing in mobiles. His book is very good and will always be a good reference for you and your business. I have since purchased 3 land/homes and don’t think I would be enjoying the benefits of rentals and creating a “landbank” if I hadn’t read his book. I would say $97 is very cheap…

Cole

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Re: Should I buy Tony’s book? - Posted by Mr. H (IN)

Posted by Mr. H (IN) on April 30, 2007 at 07:38:14:

You have $40K to invest in a LH deal but you’re not comfortable spending $97 on a book that tells you how to do it? Your numbers project 11% ROI but you’re not sure if you’re willing to spend 0.25% of the 40K to learn how?

C’mon Tim. Tony and Scott have already been through the trial and error. There’s no need for you to repeat the mistakes of others. Learn from them. You already know the answer to your question.

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Re: Should I buy Tony’s book? - Posted by Ryan (NC)

Posted by Ryan (NC) on April 29, 2007 at 19:53:24:

Tim,

Sounds like you’ve got a good start on a plan to financial freedom…

Lonnie’s books as you know is a basic primer that lays out a step by step system to make money with mobiles. Scott and Tony’s book details the who, what, when, and why of land based deals. I personally find that mobiles tend to cashflow somewhere between $150-300 per month after debt on a consistent basis in my area, it’s the system that is used to run the property and how long the cashflow will last that make a difference.

If you plan on buying even one l/h deal you will more than pay for the book when you do your first deal. I’d also recommend signing up for the bootcamp which is in August to give yourself a jump start on your plan.

Best wishes,
Ryan Needler

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Re: Should I buy Tony’s book? - Posted by Chris Reuman (Maine)

Posted by Chris Reuman (Maine) on April 29, 2007 at 19:51:02:

First of all, buy the book. Your first mistake is paying them off. This makes your money worth only 8.5%, which ia what my bank will lend to me for these deals. Since someone else is managing the properties, use your money for purchasing more deals. Also, for $500 rent, I don’t pay more than $30,000. The numbers are too thin otherwise, unless your get some great potential. My homes are amortized over 20 years, but an extra $50 a month and they pay-off in 15 years (the tenants pay them off). In 15 years, there is no mortgage and then the fun really begins.

Best investing, Chris

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Re: Should I buy Tony’s book? - Posted by Anne_ND

Posted by Anne_ND on April 29, 2007 at 19:11:48:

Tim,

What you’re missing is what is contained in Tony & Scott’s book. It’s also available for free if you search the archives.

I found the book to be worth every penny.

Anne

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Re: Should I buy Tony’s book? - Posted by M. Osterman

Posted by M. Osterman on April 29, 2007 at 18:47:12:

I’d contact your local library. I shell out a couple thousand a year in education…seminars, books, tapes, cd’s…Which reminds me…I need to order Tony’s book…Thanks!

Mike

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Re: Should I buy Tony’s book? - Posted by EJ

Posted by EJ on May 06, 2007 at 16:50:09:

Ton who…

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Well, I Bought the Book - Posted by Tim Donahue

Posted by Tim Donahue on May 06, 2007 at 15:41:58:

As I said earlier, I went ahead and bought Tony’s book. I am hoping that it can answer my many questions.

Can someone tell me whether the content in the L/H Seminar is the same as the content in the book? If not, how is it different?

Regards,

Tim

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Re: Should I buy Tony’s book? - Posted by Tim Donahue

Posted by Tim Donahue on May 06, 2007 at 14:34:31:

Marty,

I have read Lonnie’s books and they were helpful. Does Ernest have books that specifically deal with MHs on land?

I think the bank was Thomas County Federal in Thomasville, GA that quoted me “mid-seven percent” on a 15 year note, but only on MHs with permanent foundations.

Regards,

Tim

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Re: Of course you should, it will … - Posted by jpfl

Posted by jpfl on May 06, 2007 at 19:39:14:

Hey Greg,

How are you insuring your L/H pacs before you rent them or sell them if you are flipping?

Are you finding insurance coverage for the properties while they are vacant?

I’d like to get back into flipping L/H pacs but hesitate to do so because I can’t get them insured while they are vacant. Any ideas?

Thanks

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Re: Of course you should, it will … - Posted by Tim Donahue

Posted by Tim Donahue on May 06, 2007 at 14:56:54:

Greg,

I am a working man, too, but frankly getting kind of tired of it :slight_smile:

I am looking forward to the day when I can simply drive around and manage my L/H rental properties. I am not there, yet, unfortunately.

I am not clear what you mean by “… the more profit you will realize at exit.” What is the exit? Did you not hold onto any of your 75 L/H deals for rental income? What is your investment objective in doing all these deals?

My goal is to maximize current income from any L/H assets I purchase (so I can stop working for The Man). It seems like the best way to do that is to pay them off as quickly as possible and then all profit comes to me, and not a bank.

From what I have read on this forum, however, not many people seem to agree with this approach. I keep hearing that I should put down “as little as possible.” Well, maybe I’m missing something, but if you put down very little money, you end up with very little income after expenses every month. If anything at all.

With 75 L/H deals, even if you averaged only $100 monthly in passive income from each, you would have a nice monthly income ($7500). If you paid them all off, and could pull in $300 each, you could be pulling down 22.5k each month. Nice.

What is your ultimate investment objective?

Regards,

Tim

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Re: Should I buy Tony’s book? - Posted by Tim Donahue

Posted by Tim Donahue on May 03, 2007 at 19:54:48:

Mr. H.

My point was simply that I don’t know whether Tony’s $97 book will “tell me how to do it.” That was what I was trying to find out through my post. If the book is filled with valuable and relevant information, then I certainly don’t mind paying $97 for it.

But, as we both know, saying something is so don’t make it so. That’s why I was looking for specifcs.

Regards,

Tim

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Re: Should I buy Tony’s book? - Posted by Tim Donahue

Posted by Tim Donahue on May 03, 2007 at 19:46:02:

Thanks for the feedback, Ryan. I read both Lonnie’s books and found them to be very instructive. I learned alot about MHs and how to do “Lonnie Deals.” While I like the idea of someone sending me checks each month and not playing landlord, I want the income to last forever (through renting) not end in 36-48 months (by holding a note).

That being said, I am not averse to trying a Lonnie Deal, if I found one. But, I have not found any used single wide MHs for sale in Austin that are anywhere near the 3-5k sales price that Lonnie often speaks of in his two books. In addition, his quotes for MH repairs (materials and labor) seem way low. I have to wonder if Lonnie’s books were first written in the 1970s or something, when prices were much lower?

Regards,

Tim

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Re: Should I buy Tony’s book? - Posted by Tim Donahue

Posted by Tim Donahue on May 03, 2007 at 19:35:10:

Thanks, Chris. Good advice not to pay more than 30k for a property getting only $500 per month. That was the result I was getting when crunching the numbers: the numbers were just too thin.

One of the issues I hope Tony’s book covers is what is the ideal percentage to put down on a property. I always thought it really depended on what your investment objective was (current income vs. high ROI after appreciation, for example). I don’t have any interest in putting very little down and scraping by each month. I am looking for good monthly income right now, not in 15 years.

Most banks with whom I have spoke have told me that they only give mortgages on MHs with permanent foundations, so I am not sure what kind of financing options are available.

Anyway, thanks for the feedback.

Regards,

Tim

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Re: Should I buy Tony’s book? - Posted by Marty (MO)

Posted by Marty (MO) on May 06, 2007 at 17:00:50:

Ernest just has a little different take on Lonnie deals. He has excellent
information on parks. He’s real aware of taxes and how to reduce your
liability. He doesn’t really talk about land/homes like Tony and Scott
do, but his techniques apply. The Florida guys have a little different
spin. Just like Lonnie and Tony, if Steve Case or Greg Meade are
talking, I listen!

You’re in the door on getting financing. Just keep knocking. There’s a
way to sweeten the deal enough to make the bank comfortable. Maybe
a faster payoff or more money in the deal. “What do you need to do
this deal?” is a good way to open negotiations with a banker when you
don’t have a track record. Try a few more banks. It’s frustrating, but
you’ll get more confident and someone will want your business. It’s like
dealing with park managers, only they’re not as bright!

Good luck,

Marty