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Mobile Home Park Investing

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Mark Gruetzmacher
  • Investor
  • Box Elder, SD
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228
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1st Mobile Home Deal

Mark Gruetzmacher
  • Investor
  • Box Elder, SD
Posted Aug 7 2014, 21:02

Hello Everyone, I have been lurking and posting a little here and there on BP for a few month now.  Started around podcast 62 I think, listened to all the podcast in like a week or so while driving on my job.  Love Bp and all info here.  Wish I was in a larger area with other BP members to network with but you make due with what you have I guess.  Been tossing around the idea of buying some buy and hold's but houses are high here for what your return on rent is so I started looking at Mobile Homes.  Mind you mobile homes are high priced here as well where most early 70's (12 or 14 wides and 50 to 65ft long) models are usually in the range from 3-6,000 for a rough shape one in need of lots of work but rent is decent as well from maybe the $550-850 depending on the size and condition.  I knew I didn't want anything older than 1977 and would prefer something in the middle 80's.  90's would be awesome but they are all running around 15K-25K with most being over 20K.  That was too much for me to pay.  So I kept an eye out for some deals and looked at a couple older ones.  Most are just total junk and I wouldn't let my dog stay in them let alone try to rent them out but it is amazing what people buy and also rent around here.  I could by this older junk but ideally would like to have a nicer class of stuff in general.  Nicer stuff means a little better rent and maybe better class of tenent.  I finally came across a 1978 16x80 that was in pretty decent shape.  Not ideal for the age I was looking for but looked real decent for the age.  Needed carpets throughout and maybe some paint and minor stuff but overall compared to anything else it was good.  Also came with a newer washer and dryer and side by side frig.  Asking price was 5900.00 and it had to be moved.  I think it was worth all of 5900.00 in comparison to others so I put an offer in on it at $4500 and they accepted.  I had planned to move it to a park just up the street as well.  Long story short the Govt. agency that owned the home would not let me put it anywhere within my local city or even on some land I owned my self.  Again long story, so I searched around the outside my city for MH parks and didn't find park to keen on the idea of me renting out the home.  So after a few days of me looking and calling park and never getting calls back, the govt agency decided to take offers on it again.  So the broker that had the listing gave me back my deposit and I moved on but.....

On the bright side, a day or so before we decided to not pursue this 1978, I saw an ad on Craigslist for a newer 16x80 for sale.  Didn't have a price but it said it was a 94 or 95. I thought I would call on it for the heck of it because you never know.  The girl on the phone said it needs a total remodel, water leaked in from the upper wall or something where 2 pieces of trim meet so they torn out some sheetrock because it was wet.  So when we went to see it, the outside looked good.  Had vinyl siding that was in good shape, dirty but overall good.  Had a broken window or two as well.  Inside smelled of animals and all the carpet was out of it.  Some of the sheetrock walls were already torn out.  Most of the cabinets were out as well.  Some soft spots along a few walls but overall the floor was decent.  The back 2 bedrooms and bath were good.  Mainly it is the living room and kitchen that needs the work.  All the ceiling were great with no leaks or stains.  Now granted this might sound horrible to some but for me it was nothing I could not handle.  This was a 1995 16x80 3 bed 2 bath.  These around here are going for 20-25K.  So got to talking to the girl and her and her boyfriend were expecting a baby and there was no way they could fix this mobile home up before the baby comes so they decided to sell it.  Previously on the phone I asked her what she had to have for it and she said "well I at least need enough to pay the taxes" sooooooooo maybe like $700-800.  I about fell over, I first thought no way she only wants $700-800 for a 1995 16x80, I must of heard her wrong.  But after looking at it and talking to her she confirmed that she would take $700 for it.  So I gave her a deposit in the form of a check and told her I would call the county on Monday and get the taxes that were due and then meet with her to get my check back and I will pay her cash for what the difference between the selling price and taxes.  The rest of the weekend all I could think was "man I sure hope this goes through and I can't believe this is a 1995 and only $700".  Sure enough Monday came and I called the county, got the tax info and called the seller and met with her.  I ended up giving her $131 because the 2nd half of 2013 was due and then prorated 2014 taxes which has to be paid when I transfer title which ended up being 569.00.  After it was all said and done, she was very happy that I was able to buy this from her so her didn't have to worry about paying lot rent of taking the mobile home to the dump or whatever.  

So in the end I got an awesome deal of this mobile home and the seller was happy that I took it from her.  You always hear on BP of people getting deals on houses and such and the sellers are grateful that you took care of their problem for them by buying their home.  It is a win win situation.  This is a prime example of that situation with a mobile home.  

So my plan is to sheetrock the inside walls in the living room and dining room and put in some new flooring and some cabinets. I know I will have money into it but no where near what it is worth. Tax assessment on it is $22K. Sounds real good to sell it and make the cash but my main purpose is to buy it and hold it for now. Something like this should rent here for $750-850 and lot rent is $200. Renters pay utils also. Should work out ok. So in the end it pays to keep watching for decent deals. It is not a SFH like I would like to buy but the total investment is small and the rental returns are huge compared to the investment. You would have to buy a 100K and over SFH for the same return That's why I thought MH's might be the way to go.

If you have read this whole post, thanks for staying and reading.  It was shortened up a little but thought maybe some new people like me would read it and see there is always a good deal to be had.  Just takes time and patience.  Just keep looking.  Thanks again to BP for all the great info and for all the great people on here this site.

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