Posted by james on March 23, 2006 at 17:22:04:
One more question - how do screen the park to see if they are friendly and good to you, what questions to ask to get some ideas?
Words of Warning - Posted by DSmith
Posted by DSmith on March 23, 2006 at 15:34:52:
I?ve posted a couple of times about my mobile adventures.
Here?s a basic recap:
Last July I bought 2 older mobiles in a nice older park. The park ?seemed? like they were very happy for me to be there and very willing to work with me.
The first was a 1972 3/2 that I got for $900. After doing too much work (newbie mistake) and paying lot rents for 4 months I sold it for $3000. $250 down, $140 / month. It ended up being about break even.
The Second was a 1972 3/1 that I got for $800. It?s nicer than the first one and has central air, but has still not sold, so I?m up to almost $3000 in lot rents.
I said that the 2nd hadn?t sold, but that?s not exactly true. In fact, it?s sold several times. Unfortunately this park is so strict that almost no one can get approved. The buyer of my first one had to put down a $2000 deposit just to get into the park because her credit was ?questionable?. I?ve got ANOTHER buyer for the second one going through the approval process right now. She seems to be perfect, so hopefully she?ll get in and I?ll only show a small loss.
Here?s where the words of warning come in. Make sure you choose the right park to work in. I?ll never do another deal without first knowing EXACTLY how they approve their tenants. I?ll also never do another deal at a park that won?t give me, at least, reduced lot rents while I?m trying to sell.
Please don?t get me wrong, I am totally convinced that this works. In fact it worked exactly like the book for me, except for the parks lack of cooperation. This is just to warn you to do more due diligence than I did when choosing a park to work in.
Re: Words of Warning - Posted by john
Posted by john on March 25, 2006 at 07:40:18:
At the risk of knocking on wood I am going to throw my two cents worth in. A park manager is no more than anouther person in your life who requires regular maintenance, I regularly stop in and talk to my PM and he regularly unloads on me, his tenents drive him to the brink of insanity, these talks help me to tailor him and the new tenents I have brought into his park, it also allows me to keep updated on revolving mood swings (just like my wife). Nearly every person I have sent to him for approval has started off with him not liking them, the one I currently have in the chute being proccessed by him got off to a bad start when my prospect walked out of the office because he did not want to pay for the background check on his two children over the age of 18, my prospect called me immidiatly as did the PM, The PM told me he was hiding something and that is why he did not want to pay for his kids, then he went on to tell me how cocky and arrogant the guy was, My prospect said he was not about to pay these fees and that he wanted out of deal.
So I walked the guy back into the deal by using sympathy, understanding and a touch of education about how we do business in america and I will pay the fees for his two children when he is approved, he did return and semi-properly submit his application along with the required fee. I then stopped by the PM’s office a few hours later to allow him to unload on me, His biggest issue was the concern of a possible felony offence on his application, Fortuanate for me I had the inside scoop on the matter and was able to smooth the issue over with him ( I am still awaiting approval). The moral of my story is go spend some time with your park manager and just maybe you can solve one or two of thier problems or maybe not!
GOOD LUCK
Solution? - Posted by Berno
Posted by Berno on March 24, 2006 at 12:01:54:
Sorry if I mess this up, but I thought in DOW that Lonnie said he once arranged with the park manager to pay the lot rent himself so the people could live in the park. As I recall, the buyers paid Lonnie the lot rent along with the payment and then he would pay the PM. I may be mistaken, but I think this was his idea, and it might work at that park too. Just a thought.
Re: Words of Warning - Posted by Todd (AZ)
Posted by Todd (AZ) on March 23, 2006 at 17:59:04:
Hi DSmith, I had the same issue on my 2nd Lonnie deal. Had PM’s approval prior to purchasing but then, after purchasing found that “the owner approves only 1 out of 25 apps we get…she’s very picky. We’ve had 15 apps on that unit and owner has not approved anyone”. My first lookers wanted it instantly, $4,900 CASH (I paid $1,700 1 week prior) and were not approved! Second couple had $1,000 down and were also not approved! Since the PM and I hit it off initially, I gently asked if I could call the owner. I MET WITH THE OWNER and asked her (park owner) if she would take a 2nd look at the latest couple she did not approve. Then, I called the couple and said “Your application was not approved but I talked with the owner and she is willing to meet with you. Please bring any rent receipts, work history, credit proof, etc with you, dress somewhat nice, and put your best foot forward if you wish to be approved and live in this park”. Surprisingly, the owner approved them! I learned that not only should you inquire as to how receptive they are to you working in the park BUT ALSO what exactly they look for and just how selective they are. It’s doubtful I will buy in this park again even though I’m on good terms with both the PM and owner. 90% of the folks would not be approved at this park and its just too risky to sit and wait. Todd (AZ)
Re: Words of Warning - Posted by Glen (OH)
Posted by Glen (OH) on March 23, 2006 at 17:24:34:
I had somewhat the same problem on my second deal. I came waltzing into a park owned by one of the bigger dealers around here. After a quick talk with the manager I bought the home I was interested in. The fun then began. Just like the example in DOW, there was a hole in the floor where the china cabinet was, a few electrical problems ect. I put new carpet and vinyl in and put up a sign. I had plenty of lookers but after they met with the management I never heard back from them. It seems the deposits for water, lot rent, mail box keys ect. were out of this world. So…
Four months of lot rent later, a buyer showed up with her 22 year old son, whom she wanted out of the house. Luckily for me, she had a down payment that was somewhat close to what I had in the home. I explained that if she would give me the rather large down payment, I would not file a lien on the home but rather just do a personal note and give her a clear title. (I didn’t want to get the home back in that park and torture myself again.) I told her that with no lien on the home, that I couldn’t foreclose and that little Johnny wouldn’t boomerang back into her basement. (Instilling despair Karl?) Anyway, she bought the home and the payments have been somewhat regular from Junior.
Lesson learned:
Always check every aspect of the deal including due diligence with the park. I have been forunate to have a good relationship with the most parks I deal in. One manager in particular, goes above and beyond the call to help me in any way. For this I am grateful. Just like Lonnie says, one of the biggest factors in your success is the park and the manager. I was also fortunate to do the deal and get out almost unscathed. Just like you I didn’t get discouraged and kept plodding along.
Best of luck in the future!
Glen (OH)
Re: Words of Warning - Posted by Marty (MO)
Posted by Marty (MO) on March 23, 2006 at 17:03:29:
i know this is a recurring issue with weasle park owners… In MO, there are specific guidelines that spell out what landlords can charge for deposits, etc. If I were you, while I was looking for a wholesale buyer or friendly park to move to, I’d consult the attorney general’s office or a re attorney.
good luck,
Marty
Re: Words of Warning - Posted by JeffB (MI)
Posted by JeffB (MI) on March 23, 2006 at 16:23:14:
I second what Tony said, but will add one question, why did you only sell the first one for $3,000? One thing I’ve found to be true is buyers rarely care about the price, meaning you can get the same monthly payment for much longer without really any extra work. Understandably, you were probably a motivated seller when you finally did find a buyer.
For what it’s worth, I think you’ve got a very good perspective and surprisingly positive outlook on Lonnie deals as a whole, despite your early challenges. Persistence is key, if you keep at it they will get easier and easier, and more profitable. My first one was ugly, but the lessons I learned helped me make a lot more money down the road.
Re: Words of Warning - Posted by Tony Colella
Posted by Tony Colella on March 23, 2006 at 16:08:45:
Time for a heart to heart with the park manager. In this case you may need to offer to collect and guarantee lot rent to get the home filled.
I would not recommend doing anymore deals in this park since they are all to happy to collect your check on a vacant, no hassle (for them) home. This happens and usually a heart to heart about your interest in helping them fill other vacant, non-paying homes but that you can only do so if you are able to sell your homes. They need to see your side of the table and that you cannot keep paying lot rent and stay in business. If they agree to you collecting the rents they may be more flexible. It takes time to establish trust but at some point enough is enough.
I would suggest you also continue to search for other parks to do business in.
Tony
Good Save - Posted by Steve-WA
Posted by Steve-WA on March 23, 2006 at 20:45:54:
now, THAT’S creative! Never say quit, persistence will make you a success in this business, mister AZ.
Bravo Zulu to you
Re: Words of Warning - Posted by DSmith
Posted by DSmith on March 24, 2006 at 07:23:57:
Thanks for the response. I guess I?m not the only one who?s had to deal with this.
One positive thing I?ve learned doing this is that you really only need one good park to make a killing. If this park would work with me and my buyers a little more then I could have 20 homes tomorrow with all of them sold in 3 months. But no matter how many times I try to explain this to the PM, she just doesn?t get it. Oh well. You guys have gotten me motivated to try again. Thanks for that!
Re: Words of Warning - Posted by DSmith
Posted by DSmith on March 24, 2006 at 07:18:47:
I keep hearing that people only care about monthly payments, but I haven?t found that to be the case at all. I?ve never had someone not try to haggle the price down. I?d originally had it priced at $4,000, but jumped when the lady offered me $3000 and was able to get approved by the park. At this point I already knew that it was going to be difficult to get anyone in there.
Re: Words of Warning - Posted by DSmith
Posted by DSmith on March 24, 2006 at 07:12:32:
Believe me; I?ve had the heart to heart several times. They?ve flat out told me that all they care about is lot rents. I tried to explain that if they?d just work with me I could fill every vacant home in the park and in the long run be a huge benefit to the park, but they responded with ?it?s our policy to NEVER reduce lot rents?. Hopefully this new buyer will get through and then I?ll be done with this park.
I think I will start interviewing new parks so I can try it again. But this time it will have to be on my terms, or close to it.
Thanks for all of the responses.
Re: Words of Warning - Posted by james
Posted by james on March 23, 2006 at 17:20:05:
What should be the good agreement with the part in case you need to fix a MH and look for buyers that might take a few months?
Arrange to have deferred/reduced rent until you fill the place, or no rent until filled?