SOLD! - finally - Posted by Mr. H (IN)
Posted by Mr. H (IN) on May 13, 2007 at 12:08:03:
This may be longer than your normal post but I wanted to share my story in hopes that some folks new to MH investing will learn from my experience.
Sitting in a rented apartment in beautiful, historical Cartersville, GA last January, I was surfing the net trying to find some information on real estate investing when I came across Creonline. Found the mobile home investing success stories, learned about Lonnie Scruggs, and did a lot of reading.
A little history. My line of work causes me to travel. A LOT. I manage safety on construction sites. You travel where the job is. Consequently, I have worked for several different employers in at least 16 states over the years. I was always chasing the higher salary, more money, on and on. I finally settled down in IN and was finished with traveling. Or so I thought. Having worked for the same company for more than a year, they sent me to picturesque Cartersville for, what I was told, a 6 ? 8 week assignment. When I got there, the word week was actually month, thus my searching the internet looking for a different (better?) way. Through a series of events, I left that company and began working for larger company (same ol? story ? more money, better situation, etc?) but was still on the road.
During this time, I ordered both of Lonnie?s books and began searching the archives for different topics and chatting on Wednesday nights. I had missed out on registering for Boot Camp until someone had to drop out. I jumped on the opportunity. It was an eye opening experience and I got to meet some of the great people on chat. Until that Boot Camp, I was suffering from cold feet (and the fact that I was on the road). At the camp, Lonnie told us to go out and do a deal.
Well, I ended up quitting my job and rejoining my old employer with a new position requiring much less travel. I bought an older MH (14x60, 2br, 1ba), did extensive rehab (more than I thought it needed when I first looked at it) and sold it after 5 weeks. I don?t have the numbers in front of me but I think the return is somewhere around 50%. We then bought a nice 1990 14x70, 3br, 2ba. For the rest of the story on some of that experience, refer to:
We showed it a few times, had a lot of appointments that never showed, and had some folks with plenty of money and ready to go, but then nothing. I had one ?buyer? ready to give me $3k down. She must have lost my number. Another had $10k cash. The home would have to be moved to her lot. She was serious about this now. I had several conversations with her. Began to help her line up a mover, get the right permit, etc. Well, she forgot to call me one day and tell me that the deal was dead. She meekly returned my phone call and reported the bad news to me. Well now, doggonit anyhow.
After five months (see link above) we finally moved the home to a different park. Had several calls on it and showed it a few times. Had a buyer that was going to get $7k from her stepdad for a down payment and then I would carry a not for 2 years at $100 per month. Had to do it this way because the park paid for the move in and I wanted to keep control of the home for the two year rental agreement I had to sign. Wouldn?t you know it ? her boyfriend has a felony and doesn?t qualify to live in the park.
That reminds me, I had the home sold in the first park. The buyer was so excited, he called the electrical company and had the service transferred to his name. The only problem was that he had SEVEN felonies. He swore up and down that there would be no problems with the background check and took it upon himself to transfer the electricity. He didn?t qualify for the park. Doggonit. I had forgotten he did this until I went to the home one day during the winter and discovered the electricity was off. Then it struck me that I hadn?t received a bill for electricity in a number of months. We had the power turned back on (it didn?t cost us a thing ? the un-paid bill was not in our name). Seems in IN, if you want to make someone miserable, just call the power company and have their electricity turned off. Apparently the power company can?t share the information with you as to who had transferred your electricity account into a different name. That?ll be a funny joke one day on a neighbor.
Anyway, I have a knack for attracting felons.
Finally, a true sale for the home. A lady calls on a Friday evening asking about the home. Her mother lives in the park. I give her some info and asked if she wants to see it. She then tells me that she already walked through it as the door was unlocked. WHAT? I know I locked the door last time I was there. Doggonit. Anyway, she wants to know how much down and how much a month (WOW! an actual buyer that Lonnie describes in the book), we talk about it and then I tell her to go back to the home, get one of the lot rent apps, and turn it into the office Monday morning. Oh, by the way, please lock the door when you leave. She gets approved and we closed the deal yesterday. Never discussed price. We agreed on the price when we went over the paperwork.
Here are the numbers:
Purchase - 4200.00
Lot rent at the ?friendly? MHP - 1900.00
Property taxes - had to pay all of 2007 to move - 582.00
Misc - 205.00
Lot rent and deposit at the new park - 927.00
Total - 7814.00
Move - 3500.00
Total - 11314.00
Park reimbursement for move - 5000.00
Total invested - 6314.00
Sales price - 11514.00
Down payment - 550.00
Financed 10964 @ 13.10% for 60 payments of 250.00
ROI = 46.81%. Probably lower if you include the holding time. With a 5 year note, I expect to get this one back before it is paid out.
Not great but more than a savings account. And one helluva learning experience.
I?m not trying to discourage anyone (I already have a few MHs to look at for my next deal). I want people to learn from my experience ? in whatever way they can. I bought this home in October and sold it in May. I am now reviewing everything I did concerning this home to decrease the holding time on my future deals.
Please go to the link on my previous post about the park where this home was located. As Steve always says, you have to know your market. I want to add that you also need to know the people you?re dealing with and their motivation.
I did make one potential fatal error with the buyer of this home. I sent her to the office without being with her. I feel fortunate that my sale was not thwarted by the park?s sales person.
From Lonnie?s books and the good people on this board, I have learned to stop depending on an employer for more income. I haven’t completed as many deals as I had hoped to at this point but who knows what will happen next week.
As Lonnie says, now on to the next one. I wonder how the wife feels about riding the speed bumps on Mother’s Day?