Bandit signs, do they still work?

Question

Do Bandit signs still work? Looking for mobile homes for wholesale.  Use bandit signs or contact outer state owners directly? The mls is not working,to much competition because of low inventory I assume. ...

Jeffrey H. · Answer

Response rate is typically 3-5%.  I usually send 500 pieces of mail and get one or two quality deals, and is terribly better than buying something with a realtor.

I will not do a land deal unless a home is already there.  The cost to bring in a home whether new or used really diminishes the overall deal economics.  I can put that $4-5K to much better use rehabbing an existing home, which is otherwise pissed away into moving, skirting, decks, etc.  You don't get any return on those expenses.  And then you have to build a driveway if you haven't already, run utilities, etc.

I know someone who did a land home deal - 20K for the land and 30K for the home, 3K for basic site prep and utilities, putting in a concrete drive now for several grand, maybe a carport and more.  When all is said and done probably going to be 65K all in.  The comps in the area for 10 year old homes are about 70K in this neighborhood.  Now this is not a bad deal per se, as if he owner finances it could probably get 80K for it and even more if carries the paper.  But if he tries to sell it as it sits with a conventional loan he won't make anything.  It's been listed for rent for 45 days at $1,150, which in my opinion makes this unattractive.  Rents in the area are about 900, but there really isn't any need to buy a new home to rent it and sell it.  A clean home is a clean home - and the typical types of tenants that really must have a "new" home and pay a premium for it is pretty limited.  It's much easier to find someone that's okay with a nice clean home and doesn't mind if it's 10 or 20 years old on the outside but well maintained - that's my philosophy anyway.

Now compare this to my last deal I bought at 19K with 10K square feet of land with an older mobile on it that needs 5K in repairs.  I can sell it for 40-50K and carry the paper (will be rent ready mid March).  While this is slightly above comparables as well, it's very affordable regardless of who you are and expect I will have a very easy time finding someone who can establish credit over 12 months and then eventually sell it.  This is a mobile on a permanent foundation and eligible for FHA loans.  There are fewer regulations with this model than real land and personal property attached.  But on the other hand like you said you can use the land to finance the mobile home, so there are benefits to both arrangements.

I would much rather keep affordable housing affordable and move it quickly.

Rich Ferradino · Answer

Yeah I fell into that trap as well. I bought raw land and subdivided it, put the mobile homes on it, repaired it, added utilites, etc, thinking I could just refinance or get a business loan on it; but that's not the case at all.  It's really expensive and agree I could of done several deals if the home, land, foundation, utilities were all there and just needed to do slight repairs and resell it.

I tried your technique in finding mobile homes on land using the local CAD (bcad.org), but doesn't have a search function for mobile homes, unless 'm missing it. I know you're in Houston, have you used bcad finding mobile homes on land in san antonio? Do you suggest I go to the county appraisers office in person to get what I need?

Gene Livingston · Answer

What I mean is, bandit signs are no secret. Find an unusual way to identify sellers, and you will get better results.  With bandit signs, I prefer calling them, instead of placing them:-)

Jeffrey H. · Answer

Deep thoughts with @Gene Livingston- not sure how it applies to this thread.

Gene Livingston · Answer

Whatever EVERYONE is doing...do something else.

Jeffrey H. · Answer

This one was garbage too - 10 homes just east of downtown.  I backed out of it - between the infrastructure issues, crackheads, code violations and Seller lying about the financials I couldn't make it work regardless.

I found it with a keyword search on Zillow - made an offer 24 hours after it was listed and they accepted.  I still have nightmares about that park.

Rich Ferradino · Answer

Do you mind me asking which Park that was and how you came across it. Everything I've found on loopnet/MLS is pretty much garbage, but that's somewhat expected.

Jeffrey H. · Answer

Last year I had a small Park under contract in Bexar, but I haven't tried individual homes - they're a bit far for me.  I am staying within 90 minutes of home for land home stuff.  Parks I will go 6 hours.

I do remember that there are personal property codes for the county so that's good - but yes you should call the appraisal district.  Many times they are helpful to tell you how to use the system to spit out what you need with these proprietary codes and using wild cards.  If that fails then yea I would ask them to run a report for you.

Rich Ferradino · Answer

@Jeffrey H.What is your % success rate with your direct mail campaigns? Have you tried buying raw land where MHs are allowed and selling it OF? I.E. buy acre for $8k then OF it for $15k with $1k down.  Also, when you go to buy a new MH the dealer can package the land into the financing as long as the land is 50% less than the purchase price of the MH. So if the MH is $30K they can finance  the land if it's under $15k.

Lawrence Allmond · Answer

Thanks for the insight, I will start my direct mail campaign. And see how it goes..

Bandit signs, do they still work?

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