Whatta day! - Posted by JHyre in Ohio
Posted by JHyre in Ohio on May 07, 2000 at 19:59:29:
What a day?..Drove down to my parks an hour and fifteen minutes away.
First thing I did was get out of a ?tuition home?. I have had several ?tuition homes? since I started buying mobile homes last July- that is, homes that provided me with an education?for a substantial fee. Talking about these homes is embarrassing for me. Nobody likes to brag about his screw-ups. But, maybe some of you can avoid making the same mistakes by reading about mine. Then again, I knew enough from reading Lonnie?s books and talking to investors to have avoided most of the mistakes that I?ve made. But I?m stubborn and often learn things the hard way. Of course, being stubborn helps in that I?ve weathered my tuition deals and now do much better because of the experience. So if you are too thick-headed to learn from my mistakes and insist on repeating them, that?s OK?.so long as you are stubborn enough to learn and stick with it.
First, sold a 1982 3BR 14x70 that I had way too much money into?long story. Bought the thing in late October for $3750 after being told by repo broker that it was 1988. Turns out it was a 1982. LESSON ONE: To quote the Gipper when talking about those durned Russians- Trust, but VERIFY. Same repo broker offers to have his crew repair it for $600?repairs end up costing $1200. LESSON TWO: When somebody screws you once, shame on him. Screws you twice- shame on YOU! Same Repo broker has a buyer for me. Repo broker gives me the down payment?.less $500, I find out from the buyer a few months later. LESSON FOUR: Deal directly with the buyer- no intermediaries unless they are PROVEN to be rock-solid. Repo broker states that buyer?s credit is weak because he?s young and has no credit. Buyer turns out to be a deadbeat- I squeezed two payments out of him with lots of effort before finally kicking him out of the mobile home. Had I reviewed the credit report, I?d have known broker was lying. LESSON FIVE: Do your OWN due diligence- and see LESSON ONE. Sat on mobile, paid a few months lot rent, had to replace the furnace because it was spewing carbon monoxide. LESSON SIX: Fire alarms (as described in Deals on Wheels) AND carbon monoxide detectors are a CHEAP insurance. So at this point I had a lot more into this home than I ever wanted. My park managers had a nice couple- newly arrived in Ohio, so-so credit (recent past good, had health care bill problems in the more distant past- this is VERY common), but only $500 down after the park got its rent and deposit. They handed me the credit report (See, I DO learn eventually) and I interviewed the prospective buyers. They seemed all right (you get a ?feel? for people after dealing with enough of them. My gut is sometimes wrong?.but less so as I get more experience). They have good income. Now they are in the home on $15,000 note @14%. I intend to refi out of that note out in a few months?if I?m right and they pay on time for a few months. Otherwise the tuition continues. I must admit, I took less of a down than I would normally demand on a nice 3BR. That is partly because I was sick of paying lot rent?in other words, I?d become a bit of a motivated seller myself. We?ll see what happens. By the way, I do not deal with that broker any more. In fact, I literally think 9 out of 10 mobile home brokers/salesmen are VERY sleazy and flat-out thieves. So watch your backs out there! My managers like me because I do not lie, cheat or steal. What a sad statement about the industry as a whole.
Went and visited my repair crew. They are working on a SOLID 1974 14x70 2BR?.it has a beautiful kitchen. Paid $1000 to the park for it and crew $1800 in materials and labor?.needed lots of work. Park says I do not need to pay lot rent on this one. One interested buyer is looking at it tomorrow?.she says she has $1500 down. Repair crew found another potential buyer with about $1500 down as well. Intend to sell for $13,500 after repaired, so if either buyer pans out, will have $1300 into the home after down and $12,000 note ($1,400 into it if I pay referral fee to the repair crew). If these buyers drop out, managers will find someone else fairly fast. I gotta have at least $1,000 down- and can wait for the right buyer since I?m not eating lot rent. This one should work out just fine.
Park manager has three abandoned homes. She said that if I get title to them via the courts I can have ?em for $1000 each and don?t need to pay lot rent on any of them. I?m taking this Friday off to draft & file motions (Ed W: and sue that guy in Toledo!). First one is totally trashed- I wouldn?t take it for free (I?d have to evict the raccoons that currently reside there). Second one is 14x60 2BR in average shape, needs about $600 in work. Should sell for $1000 down plus $9000 note. Third one is same as first, in worse shape (about $800 to fix) but has a tip-out. Mother of one of my other buyers sent a buyer to me. He didn?t have much for a down, so we agreed to following- he fixes it up. Then gives me $200 down. Then (and only then) moves in. So I?ll have $800 in it and $9000 note with payments of about $215/ month. I also found 2 other similar homes- about to be turned over by current residents, park?ll give ?em to me on same terms as others, each needs about $1800 in work unless I can find another ?as is? situation.
Park also tells me about ?Karen?. Karen owns 2 homes in the park. A relative has abandoned an early 70?s 3BR in average shape (i.e.- about $600 in repairs needed) and she?s getting hammered on lot rent. She appears willing to surrender title to anyone who will pay $600 in back rent. She hasn?t returned my call, though, so maybe she?s not motivated enough yet. Knock on wood?.because I have a buyer with an older 2BR remodeled trade-in and a few hundred in cash that is looking for exactly such a home.
Have a buyer for a trade-in that I?m getting tomorrow (described in an earlier post). Had a home with $4,750 in it, sold for $9000 cash + remodeled 10x50 as the trade-in. Buyer of the trade-in will pay $500 down & $4500 note early next week?I like it when they move fast.
Just bought 1982 14x70 3BR with tip out, all in very good shape (@$200 in repairs to be done) for $3000. I have several buyers looking at it already. Those 3BR?s move fast. I figure this one will go for $7500 cash (35% likely) or $12,500 note with $1500 down (65% likely).
Whatta day! How I envy you guys who can visit your local parks daily?..
John Hyre
