Should I purchase it?
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Real Estate Investor · Member since 2009 · 260 posts · 119 votes
15yEven if you did pay too much for it, don't fret. I'm pretty sure all of us paid too much for our first deal.
If I were you I would take care of all the ''must fix'' stuff before you worry about the 'would like to fix'. If at the end of the repairs you still have room in your budget then go for the optional repairs.
Can you post some pics of the inside/outside?
As far as your question goes about the wood paneling.. I recommend having it painted if you can. Paint is cheap and makes a world of difference. I really didn't consider it until people were telling me my homes were old (even though they had new carpet, flooring, ect) so I wondered what I thought made the home look old. The old 1970's paneling, that's what!
If you are using KILLZ primer, buy OIL BASED KILLZ. If it's not oil based, then the water stains you are trying to cover will bleed through still.
I wouldn't worry about the wavy ceiling. You are selling these homes because of TERMS not because their luxary.
I certainly wouldn't buy a washer or drier for it either. If you buy a stackable, a buyer might think it's too small. If you buy full size the buyer might think it takes too much room. Leave it as is and advertise "Washer and Drier Hook ups!" Let the buyer use their imagination and their pocketbook.
One last thing to mention.. tearing up and replacing floors is very labor intensive. If you can, screw the new plywood right over the old plywood. Also if you can find 3/4 OSB board it's about half the price of plywood.
51 Replies
- Real Estate Broker · Canton, GA · Member since 2010 · 15k+ posts · 11k+ votes15y
Would you own the land as well or just the trailer??
Just the trailer with paying additional lot rent it's pricey.
- Real Estate Investor · Member since 2009 · 260 posts · 119 votes15y
It sounds like you would be buying the home from another investor doing what you're doing and if that's the case you can be pretty sure that he's not going to leave much/any margin for you. You want to get your money back out of the deal and start making a profit ASAP. $8k is a big number to swallow and could take a longer to get your money back then I would like to wait.
Although if this MH is real property meaning that you own the land underneath too I would say that's probably a good deal.
A few things I would like to point out...
- The only thing less desirable then an old 2/1 is a 1/1.
- A < 60' trailer is considered to be 'short' (70' is ideal and I won't buy anything under 12' wide)
- YOU could have remodeled this home yourself for less than 2k labor and materials (paint, flooring, new carpet, laminate flooring, ect).
- Nobody likes a small bedroom. (small bedroom isn't a deal breaker but it's certainly not a selling point).
Keep in mind I'm not familiar with your market but it sounds like 8k is where you are going to want to sell at in which case my max offer would be 3k.
Here is a picture of a home I just bought back for 3k. It's a 1972 12'x60 2/1.
Currently listed at $8900 financed or $7400 cash.
Regardless of whether you plan to buy the home or not you should definitely go take a look at it. It will put you one MH closer to your comfort zone. I used to put my hands on any home just to get the feel for talking with the people, asking questions, and inspecting the home.
- Health Benefits Rep. · Meridian, ID · Member since 2011 · 44 posts · 8 votes15y
Thanks for the response Terry. I was just in the park where it is located, there is no way this mobile home is as nice as the one you just posted. I have a feeling it has the old metal exterior...
That park even looks nice and clean, is it?
What was their original asking price?
A home like that would be listed above $10k here.
What would you say as a percentage you want as a discount from market value? I'm shooting for 60%.
- Real Estate Investor · Member since 2009 · 260 posts · 119 votes15y
Originally posted by Alex H.:
Thats a nice looking MH you got there Terry!!How much did you have to put in it?Thank you. I didn't put anything into it, bought it as is.
Originally I paid $500 for it when it looked like this:
Sold it a few weeks later for $3500. He did everything you see then sold it back to me for 3k because he had bought a single family and had to get out.
- Real Estate Investor · Member since 2009 · 260 posts · 119 votes15y
Originally posted by Eric Gard:
Thanks for the response Terry. I was just in the park where it is located, there is no way this mobile home is as nice as the one you just posted. I have a feeling it has the old metal exterior...That park even looks nice and clean, is it?
What was their original asking price?
A home like that would be listed above $10k here.
What would you say as a percentage you want as a discount from market value? I'm shooting for 60%.
It's a decent park, not a 4 store but it's not run down either. All the homes in here are mostly early 70's models and 2/1's.
I don't go for a % so much as I figure out how soon I want to make my money back. I like to stick around 6 months if I can. So for this one I figured I could get about 2k down and payments of $250/month would get me back my money in about 6 months.
When you start spending 4k or more on a deal it takes longer to get your money back which means if they quit paying, or trash the place you are still upside down when you have to take it back putting you even further in the hole.
- Health Benefits Rep. · Meridian, ID · Member since 2011 · 44 posts · 8 votes15y
Originally posted by Terry Drake:
It's a decent park, not a 4 store but it's not run down either. All the homes in here are mostly early 70's models and 2/1's.
I don't go for a % so much as I figure out how soon I want to make my money back. I like to stick around 6 months if I can. So for this one I figured I could get about 2k down and payments of $250/month would get me back my money in about 6 months.
When you start spending 4k or more on a deal it takes longer to get your money back which means if they quit paying, or trash the place you are still upside down when you have to take it back putting you even further in the hole.
6 months huh? thats quick!
I guess I just havent found the right park yet. The ones I have looked at so far (6 so far)have either been really nice and out of my price range, or really run down. I might have to get further from home. I'm spending most of the day tomorrow cruising other parks after I check out the $8k mobile home, which is in a run down park.
I cant thank you enough Terry, I have read a lot of your posts on here and they have been great.
- Real Estate Investor · Member since 2009 · 260 posts · 119 votes15y
Originally posted by Eric Gard:
6 months huh? thats quick!
I guess I just havent found the right park yet. The ones I have looked at so far (6 so far)have either been really nice and out of my price range, or really run down. I might have to get further from home. I'm spending most of the day tomorrow cruising other parks after I check out the $8k mobile home, which is in a run down park.
I cant thank you enough Terry, I have read a lot of your posts on here and they have been great.
6 months us just my rule of thumb or preference (6 months is pretty attainable if you stick within the budget $2-3k) Have you read Lonnie's books? He does a good job of explaining the difference between ROI on a 2-3k home vs spending 5-6k on a home. If you can get in and get out of deals under 3k you will find that not only do you hit the black ink quicker but it also leaves you with more capital to complete multiple deals.
BTW You're very welcome. I'm glad you have found some of my post to be helpful!
- Health Benefits Rep. · Meridian, ID · Member since 2011 · 44 posts · 8 votes15y
Originally posted by Terry Drake:
6 months us just my rule of thumb or preference (6 months is pretty attainable if you stick within the budget $2-3k) Have you read Lonnie's books? He does a good job of explaining the difference between ROI on a 2-3k home vs spending 5-6k on a home. If you can get in and get out of deals under 3k you will find that not only do you hit the black ink quicker but it also leaves you with more capital to complete multiple deals.
BTW You're very welcome. I'm glad you have found some of my post to be helpful!
I havent read Lonnie's book yet, I'm gonna look for it and purchase it. I'm just waiting for my business account to get set up first before I start purchasing things.
BTW I found a great mobile home park today. We visited 24 mobile home parks in the area today, over 100 miles traveled in all. Found 2 or 3 possible deals that were for sale by owner and or un-occupied.
I'm really having a hard time finding a 3/2 or 2/2 listed for under $10k. I'm hoping the new park I just found will produce something tomorrow, I dont know if the park management will be around though.
- Real Estate Investor · Member since 2009 · 260 posts · 119 votes15y
Originally posted by Eric Gard:
I havent read Lonnie's book yet, I'm gonna look for it and purchase it. I'm just waiting for my business account to get set up first before I start purchasing things.BTW I found a great mobile home park today. We visited 24 mobile home parks in the area today, over 100 miles traveled in all. Found 2 or 3 possible deals that were for sale by owner and or un-occupied.
I'm really having a hard time finding a 3/2 or 2/2 listed for under $10k. I'm hoping the new park I just found will produce something tomorrow, I dont know if the park management will be around though.
The knowledge you would obtain by reading the book now is far more valuable then the $35 write off. Especially considering the time and energy you are putting forth in searching parks and looking for deals. JMHO
- Health Benefits Rep. · Meridian, ID · Member since 2011 · 44 posts · 8 votes15y
Originally posted by Terry Drake:
Originally posted by Eric Gard:
I havent read Lonnie's book yet, I'm gonna look for it and purchase it. I'm just waiting for my business account to get set up first before I start purchasing things.BTW I found a great mobile home park today. We visited 24 mobile home parks in the area today, over 100 miles traveled in all. Found 2 or 3 possible deals that were for sale by owner and or un-occupied.
I'm really having a hard time finding a 3/2 or 2/2 listed for under $10k. I'm hoping the new park I just found will produce something tomorrow, I dont know if the park management will be around though.
The knowledge you would obtain by reading the book now is far more valuable then the $35 write off. Especially considering the time and energy you are putting forth in searching parks and looking for deals. JMHO
I was able to get a copy yesterday, I'm reading it :D
I also just found a 3bed / 1 bath home listed for $1000. I'm gonna go check it out today, it sounds like the roof had a slight leak since they didnt seal the roof well enough when the wood burning stove was installed. I dunno, I will let you all know the condition after I check it out.
- Full-Time Investor · Charlotte, NC · Member since 2009 · 2k+ posts · 1k+ votes15y
i agree with terry...it sounds like another investor is trying to sell to you on a lonnie deal...with that payment and lot rent, will you cashflow? it's best to work with motivated, distressed sellers....good luck
- Health Benefits Rep. · Meridian, ID · Member since 2011 · 44 posts · 8 votes15y
Originally posted by BryanA:
i agree with terry...it sounds like another investor is trying to sell to you on a lonnie deal...with that payment and lot rent, will you cashflow? it's best to work with motivated, distressed sellers....good luckYea I agree, I have passed on this deal. I was hoping he might be motivated since he just moved out of state, but even if he is motivated and I could buy it for $5k I dont think I would after the better deals I found this weekend :)
- Health Benefits Rep. · Meridian, ID · Member since 2011 · 44 posts · 8 votes15y
I just looked at the 3bed /1 bath mobile home for $1000, it was in awful condition.
Carpet pulled up, now plumbing fixtures(they were taken out), no water heater, busted main pipe going to the kitchen, half the light fixtures are missing, and the roof had leaks all over the place, no appliances, only plus part was that non of the windows were broken.
- Health Benefits Rep. · Meridian, ID · Member since 2011 · 44 posts · 8 votes15y
Ok I have 2 new prospects lined up,
The first I found this week in the local paper. The deal is a 3/2 home in a decent park asking $8000. I spoke with the owner and he said he needs to sell by the end of the month, he is looking to get cashed out. So I'm gonna go drive by tonight and see how it looks, if it looks nice I'm gonna wait him out and see if we can strike a better price(around $5000) near the end of the month.
Deal number 2 I found while driving around local parks on sunday. The park owner/manager owns a 2/1 mobile home in a decent park. He normally fixes them himself and then sells them. However he is currently working on 3 so he is willing to sell this one for $3800. From the sounds of it, the home is in good shape. I remember driving by that particular home and I really wasnt expecting the price to be so cheap, so I'm very hopeful on this one. I'm going to look at it on friday at noon, so I will let you know how it goes.
- Health Benefits Rep. · Meridian, ID · Member since 2011 · 44 posts · 8 votes15y
I purchased deal number 2 mentioned in my last post, for $3200(definitely paid to much). We started cleanup and repairs over the weekend.
I have started tearing up the floor near the back door that was damaged due to water. This is a cheap fix since I already have 3/4" plywood and 2x4's.
We are putting in new/used carpet in the 2 bed rooms ($50 total on Craigslist).
We are looking for linoleum to replace the kitchen and bath room floors, any suggestions on this?
The whole house is imitation wood paneling in pretty good shape, we cant decide if we should paint it or not?
The ceiling in the living area is wavy, should we bother replacing it? or fix it? can it be fixed?
The washer and dryer hook up is in what could be a nice sized master bed room. I guess there was a 2nd bathroom before someone remodeled and stuck the washer and dryer in there. We are considering moving the hookups into the large bathroom and use a stack washer and dryer. I dont want to buy a stack W/D though, they are like $500 used. What do you think? should we just add closet doors to conceal the W/D where they are?
- Real Estate Investor · Member since 2009 · 260 posts · 119 votes15y
Even if you did pay too much for it, don't fret. I'm pretty sure all of us paid too much for our first deal.
If I were you I would take care of all the ''must fix'' stuff before you worry about the 'would like to fix'. If at the end of the repairs you still have room in your budget then go for the optional repairs.
Can you post some pics of the inside/outside?
As far as your question goes about the wood paneling.. I recommend having it painted if you can. Paint is cheap and makes a world of difference. I really didn't consider it until people were telling me my homes were old (even though they had new carpet, flooring, ect) so I wondered what I thought made the home look old. The old 1970's paneling, that's what!
If you are using KILLZ primer, buy OIL BASED KILLZ. If it's not oil based, then the water stains you are trying to cover will bleed through still.
I wouldn't worry about the wavy ceiling. You are selling these homes because of TERMS not because their luxary.
I certainly wouldn't buy a washer or drier for it either. If you buy a stackable, a buyer might think it's too small. If you buy full size the buyer might think it takes too much room. Leave it as is and advertise "Washer and Drier Hook ups!" Let the buyer use their imagination and their pocketbook.
One last thing to mention.. tearing up and replacing floors is very labor intensive. If you can, screw the new plywood right over the old plywood. Also if you can find 3/4 OSB board it's about half the price of plywood.
- Health Benefits Rep. · Meridian, ID · Member since 2011 · 44 posts · 8 votes15y
Terry, lol thank you so much for mentioning the oil based Killz. My wife and I were back and forth on which to buy, then we bought water based since it would be easier to cleanup. We havent opened it yet, so its going to get exchanged.
Great point about fixing what "needs" fixing, I should go back through the to do list with that in mind. Its tough not to "want" to fix things.
I will post up some pics as soon as I remember to bring in pics to the office. I have a whole bunch I just need to upload them :)
- Flipper · Mission, KS · Member since 2009 · 23 posts · 8 votes15y
If you paint it, don't buy full price paint. Go to Sherwin Williams and ask if they'll sell their mistints (paint that was tinted incorrectly and therefor unsellable). You can get paint that usually goes for $25/gallon for $5/gallon. Mix all the colors up, it will usually come out beige. You can paint the whole home for $50 materials that way.
- Health Benefits Rep. · Meridian, ID · Member since 2011 · 44 posts · 8 votes15y
Originally posted by Eric Schleuning:
If you paint it, don't buy full price paint. Go to Sherwin Williams and ask if they'll sell their mistints (paint that was tinted incorrectly and therefor unsellable). You can get paint that usually goes for $25/gallon for $5/gallon. Mix all the colors up, it will usually come out beige. You can paint the whole home for $50 materials that way.Great tip! We have been picking up mistinted paint from walmart, and left over paint from the rehab store for about $8 per gallon. The best place we have found so far is our local transfer station, we get the paint for free from that place :)
- Real Estate Investor · Member since 2009 · 260 posts · 119 votes15y
How much do you think you will have put in this deal all said and done and what do you think you could sell it for in your market?
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