Help - Can't Sell - Am I missing something?

Mobile Home Park Investing
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Help - Can't Sell - Am I missing something?

James Homes
Pompano Beach, FL · Member since 2012 · 11 posts · 0 votes

I have a mobile home in a 55+ community in a great location only 8 minutes to the beach.

It is an older mobile but that is only the frame. Being a master carpenter when we purchased the home I completely gutted it to the frame and rebuilt it as if it was an actual house.

New plumbing, sub-floors, ceramic floors throughout. Completely drywalled including ceilings not soft or hard panel.

It was 3 bed 2 bath that I turned into 2 bed 2 bath to make an oversized master bathroom and living room.

The master bathroom features a walkin jacuzzi tub and his /her sinks.

The kitchen is granite with built in wine cooler, side by side fridge, etc that is included in the sale.

I built a outdoor Florida sunroom that is ceramic floors and features a tiki bar.

Master bedroom has patio door that I built which leads to cozy balcony in backyard that leads to hut tub with all plumbing and electric underground.

Storage / work shed / laundry room has all new plumbing for washer and dryer.

PART 2 OF POST WILL FOLLOW

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Jon Klaus
Developer · Garland, TX · Member since 2008 · 8k+ posts · 4k+ votes
13y

Condition, Price, Location, Exposure.

Sounds like you are there on some of these. Can you improve any of the above?

Can you offer financing?

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  • James Homes
    OP
    Pompano Beach, FL · Member since 2012 · 11 posts · 0 votes
    13y

    PART 2

    Even the damn guest bathroom has granite with high end toilet.

    Also the living abd bedrooms are fitted with hurricane impact windows. The home has central air but we also have 3 individual ac units in the home as its easier to run 110 on generators should the power go out during a hurricane.

    We have had it listed for a few months now pretty much on every classified site on the net. Yes we receive inquiries pretty much on a daily basis and had a few showings, low ball offers but nothing solid.

    We lowered the asking price to 23K and monthly lot rent is 589$.

    We are dumb found because a few days ago a couple came to look at a our home, loved it then proceeded to go down the street and buy a mobile home for 3000$ less then our asking price and that home had moldy carpets with a rotten floor due to water damage and walls were panel.

    Technically we are not in a rush to sell as we bought a new house that I am almost done renovating. Should be moved in by mid Jan but at same time we still want to sell.

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  • Jon Klaus
    Developer · Garland, TX · Member since 2008 · 8k+ posts · 4k+ votes
    13y

    Condition, Price, Location, Exposure.

    Sounds like you are there on some of these. Can you improve any of the above?

    Can you offer financing?

    1Reply
  • Matt Devincenzo
    Investor · Clairemont, CA · Member since 2011 · 3k+ posts · 2k+ votes
    13y

    Did you try to ask the looker you had a few days ago why they didn't buy yours?

    Only thing I could say is it sounds over built for a MH and I'd say too pricey, but if your price is still in the range of the others then I'd suggest trying to talk to people who have been through and see what their comments are. That's probably your best source of info on what they're looking for and what their issue with your place is.

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  • Jon Holdman
    Rental Property Investor · Mercer Island, WA · Member since 2008 · 22k+ posts · 14k+ votes
    13y

    How does $23K compare to similar homes in the same park? I don't necessarily mean with similar high-end finishes unless there are many other houses with the same sort of finishes. But just similar size, age and condition?

    How long have you had it for sale? What's typical days on market for properties like this.

    Is it on the MLS? Are similar properties on the MLS?

    It sounds like you're getting traffic. What's the feedback from the people who have seen it?

    It almost always comes down to price. For $1, I'm sure you would sell it by the end of the day. If numerous similar houses are selling for, say, $15K, you're not getting $23K.

    Have you done something that is highly unusual for that sort of house? If I was looking at travel trailers (which I do realize this is not), and someone had put in sheet rock and granite, I would consider them to have destroyed the trailer. It might be beautiful, but the sheet rock and granite wouldn't withstand being hauled down the road. When you say you have improved it as if it were a house, did you do something that really should not have been done to a mobile home? Or, have you just gone above and beyond what's needed and you're going to take a loss vs. your improvements?

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  • Seth WilliamsPro Member
    Specialist · Grand Rapids, MI · Member since 2012 · 582 posts · 353 votes
    13y

    Hey James,

    Have you considered offering seller financing on your property? I've found that seller financing opens up the flood gates to MANY more potential buyers for properties like this. It also generally allows you to get a higher asking price and earn extra interest & servicing income along the way. Seller financing has been a total game-changer for my business, because I can sell properties for a MUCH higher price, generate multiple streams of income and make a lot more money over the long haul.

    Financing a sale isn't difficult or expensive. I do them all the time with minimal effort. It also generally isn't a bad thing if/when a borrower stops paying (which has been rare, btw), because you get to take the property back and re-sell it all over again.

    Podcast Guest on Show #39
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  • James Homes
    OP
    Pompano Beach, FL · Member since 2012 · 11 posts · 0 votes
    13y

    Yes the price is in line with the others. Actually the park even put in new homes and are selling them for 59,990$ with a few of them already sold.

    In the park the homes for sale between 10 to 20k are either old single wides or small double wides that are a basic mobile home with panel walls and carpet floors.

    It is also not my first I am selling I have been buying vaction homes for about 15 years. The last one we had was nothing compared to this one and we sold it in 2 days for 25k cash.

    The only reason this one is over the top with renovations is because my wife and I planned it to be our final retirement place so I built what she wanted however things change and a good deal on a house closer to the beach came up.

    I have not spoke to those buyers yet I have been keeping my eye out when I walk the dogs but I think they only move here in Jan. I know the kitchen turns some people off as its alot of leopord and lion design. Wifes German and they like that stuff lol but its only wallpaper which i tell them

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  • Jon Holdman
    Rental Property Investor · Mercer Island, WA · Member since 2008 · 22k+ posts · 14k+ votes
    13y

    Is the place perhaps overly personalized? If its "only wallpaper", you would be FAR better off replacing it with something more neutral than telling prospective buyers "its only wallpaper". Some people see stuff like that and are mentally done.

    Also, you mention dogs. Does the place smell like dogs? Could you have a neighbor come give it a sniff?

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  • James Homes
    OP
    Pompano Beach, FL · Member since 2012 · 11 posts · 0 votes
    13y

    Hey Seth,

    What would the best way to go about seller financing?

    A down payment and a monthy payment that includes the monthly lot rent? So I pay the lot rent for them and the remaining balance goes to what they owe on the house.

    Or down payment and monthly payment not including lot rent?

    The thing that turns me off with seller financing (but I could be wrong) is I don't want to have to chase people for money. We are also not always in Florida we spend a few months in Bahamas and Canada or we are in other areas of FL and it seems that it might turn into a headache trying to collect payments.

    If I then had to evict someone for non payment it also seems likea big hassle but like I said I could be wrong.

    We were also considering renting it we just had to pass on a couple that offered 1500$ a month for jan through march as we don't want to have a renter there incase someone comes to buy

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  • Jon Klaus
    Developer · Garland, TX · Member since 2008 · 8k+ posts · 4k+ votes
    13y

    This actually sounds really good for a home that you are going to sell for $23K. Find somebody to manage it and rake in the rent.

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  • Don KonipolBusiness Member
    Investor · The Woodlands TX / Avon, CT · Member since 2009 · 6k+ posts · 10k+ votes
    13y

    Mobile homes are a hybrid, somewhere between real estate and vehicles. As such, people look at aspects of both. so not only will they consider condition, but also year. Unlike a stick built house, mobile homes do not become more charming with age. So even though you made this particular MH perfect (condition wise) you still have age bias against you. I bet a few prospects were ready to buy until the learned the age of the MH

    Private Mortgage Financing Partners, LLC
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  • James Homes
    OP
    Pompano Beach, FL · Member since 2012 · 11 posts · 0 votes
    13y

    Hey Jon,

    Yes you are correct that it is somewhat over personalized with my wifes taste so we probably only get 8% of buyers that it somewhat appeals to.

    No smell of dogs they are trained and house is always clean. When buyers come we bring the 2 dogs to our new house and clean again.

    I am looking for a PM feature and will send you a link to pictures if you would not mind taking a quick look

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  • James Homes
    OP
    Pompano Beach, FL · Member since 2012 · 11 posts · 0 votes
    13y

    If any of you would like to see photos here are some. I know the kitchen is way over personalized. When I am done renovating the new house I will get to removing the leopord wall paper and painting it a neutral color. Got to keep the wife first lol.

    If can give me fedback it would be appreciated.

    http://demmamobilehomes.com/countryfs1.html

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  • Jon Holdman
    Rental Property Investor · Mercer Island, WA · Member since 2008 · 22k+ posts · 14k+ votes
    13y

    IMHO that leopard stuff and the dark colors are killers. Declutter the place and neutralize the colors.

    I see the park doesn't allow rentals, unfortunately. But then it also says only one small pet.

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  • Leslie A.
    Real Estate Investor · Houston, TX · Member since 2010 · 499 posts · 206 votes
    13y

    Hi James,
    I looked at the pictures and I believe you should definitely get rid of all the animal print. I think it is a bit overpowering. I would also remove a lot of the accessories, pillows, and wall decorations. Give it a nice, simple, clean look.
    It's lovely, but many people will not like that look. I would imagine especially in a senior park.
    HTH

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  • James Homes
    OP
    Pompano Beach, FL · Member since 2012 · 11 posts · 0 votes
    13y

    Yes very over powering and we should be moved to our new house mid Jan so we can take new pics and change colors.

    Jon, that is old posts never updated by the realtor site and the parks site. Probably a year id say lol. Many times I had to hide my dogs lol but the rules have been changed now.

    They allow all size dogs except 5 breads are banned (Pitts, Sheapards,etc)

    Also were allowed to rent 3 months a year but even at that everyone rents longer or they rent rooms out.

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  • James Homes
    OP
    Pompano Beach, FL · Member since 2012 · 11 posts · 0 votes
    13y

    Just want to thank you all for all your help and suggestions. Happy Holidays!

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  • Seth WilliamsPro Member
    Specialist · Grand Rapids, MI · Member since 2012 · 582 posts · 353 votes
    13y
    Originally posted by James Homes:
    Hey Seth,

    What would the best way to go about seller financing?

    A down payment and a monthy payment that includes the monthly lot rent? So I pay the lot rent for them and the remaining balance goes to what they owe on the house.

    Or down payment and monthly payment not including lot rent?

    The thing that turns me off with seller financing (but I could be wrong) is I don't want to have to chase people for money. We are also not always in Florida we spend a few months in Bahamas and Canada or we are in other areas of FL and it seems that it might turn into a headache trying to collect payments.

    If I then had to evict someone for non payment it also seems likea big hassle but like I said I could be wrong.

    We were also considering renting it we just had to pass on a couple that offered 1500$ a month for jan through march as we don't want to have a renter there incase someone comes to buy

    James,

    If you're financing the sale, you essentially are the bank. This means you can require any terms you want (within reason). With all of my deals, I usually require a large enough down payment to protect me in the event that they do default. I want to know that I'll be okay no matter what happens. I also charge 9.99% interest and people are more than happy to pay it.

    When I utilize seller financing, I don't have to chase people for money. Ever. If they don't pay, they're out in 45 days - that's it. I get to keep 100% of every payment they've ever made to me, and I get to sell the property all over again (this usually ends up making the deal a lot more profitable than it was to begin with).

    If I were you, I would make them handle both the payment of the lot rent AND the payment to you. Do your research on these people and once you know they're credit worthy, put ALL the property's problems in their lap, not yours. Remember, this isn't a rental property - if something goes wrong, they own it, which means it's their problem, not yours.

    Evicting people can be a hassle, there's no point in sugar coating that part of it... but it's usually worth the hassle and (in my opinion, it's worth the risk). A lot of it depends on how much equity you have in the property. In my case, I typically have 100% equity in each deal, which frankly makes it hard for me to lose.

    The more flexible you can be and the more options you can offer your potential buyers, the faster you will get this thing sold. If you're only willing to be cashed out of this property in one lump sum (and this is how a lot of people operate, btw), you could be sitting on it for longer than you really need to.

    Podcast Guest on Show #39
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  • James Homes
    OP
    Pompano Beach, FL · Member since 2012 · 11 posts · 0 votes
    13y

    Thanks Seth,

    Appreciate the explanation and I think this is the route I am going to take. Seems much easier now.

    I do have a few questions for you as this would be my first time offering owners financing. The money is not a problem but I still would like a sizeable down payment and potentially the rest with that same year.

    Would the contract have to be drawn up by a lawyer or notorized? Or is it simply my terms on a paper signed by both parties and witness.

    When there is a buyer they first must make an application with the park (Background check, etc) once they approve them they can buy the home. After it is bought I go to the dmv and transfer the title to them. Then they must go to the park show that they now own the place to take our name out of the system to start sending the lot rent in there name. If I am offering owners financing do I sign the title over to them? Thats technically saying they own the place and it's the only way to get them in the system. PART 2 will follow

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  • James Homes
    OP
    Pompano Beach, FL · Member since 2012 · 11 posts · 0 votes
    13y

    PART 2

    If they have title and I only have the contract saying they owe me money then is there not a chance I would get screwed over and something that would take years in court to fight?

    If I had the title in my name still then I have leverage. Sorry I am confused on all that

    Aside from that what is a good down payment to ask for. I can't see someone paying me 1000$ a month plus there lot rent and utilities. If I take a low down payment and low monthly payment I would be collecting money for 2 years or so.

    Would this be to much. 15k down remaining owed 8k at 5% interest total 8400$. 12 payments of 700$. This way they can survive to as they still have lot rent to pay and utilities.

    I do see alot of the homes the park sells they of 1500$ a month for rent to buy. So maybe my numbers are to low?

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  • Seth WilliamsPro Member
    Specialist · Grand Rapids, MI · Member since 2012 · 582 posts · 353 votes
    13y

    Hey James,

    All good questions.

    For all of my seller financed deals, I use a standard Land Contract form (aka - Contract for Deed). To find the right version for your state, you can check out this link here: http://retipster.com/landcontract

    One option would be to have your contract drawn up by a lawyer, but I've found that they always charge a ridiculous amount for a very simple job. Personally, I always handle this part myself.

    Since this is your first seller financed deal, it might be worth hiring an attorney (just so you can learn the process) or at least working with a title company, but that's up to you.

    Regarding the down payment, it just depends on what works within your buyer's budget. I usually ask for somewhere between 5% - 20% (whatever makes me feel comfortable).

    Most buyers have one or two things that they consider most important. Some people want 0% interest, some people want a low purchase price, some people want a low down payment, some people want a low monthly payment....

    you usually can't give them everything, but you can appease them with one or two of these things. If you can give them what they want and still have a profitable deal on your hands, do it!

    I actually wrote an ebook that explains this entire process in great detail. If you want me to send you a free copy, send me a PM and I'll get it in your hands. I think it will answer most (if not all) of your questions.

    This process seems intimidating to a lot of people, but it isn't difficult or expensive. With a little bit of basic education, you can be on your way to financing ALL of your deals (and making a lot more money along the way).

    Podcast Guest on Show #39
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  • James Homes
    OP
    Pompano Beach, FL · Member since 2012 · 11 posts · 0 votes
    13y

    Seth,

    Hope your weekend was enjoyable.

    Yes, I would greatly appreciate reading you ebook. I will send over my email via pm.

    I would like to thank you for taking the time out of your day to help me.

    Happy holidays to you and your family!

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  • Ken Rishel
    Specialist · Springfield, IL · Member since 2011 · 700 posts · 479 votes
    13y

    Bear in mind that engaging in seller financing requires compliance with both state and federal laws as well as the "new" responsibilities for those who sell, but do not finance.

    There are numerous threads here on state and federal compliance issues and the need to set up a Compliance Management System that can give you some sense of what needs to be done. A failure to do so can subject the non compliant to serious fines and other administrative actions, as well as criminal prosecution.

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  • Sabrina Laplante
    Real Estate Investor · Squaw Valley, CA · Member since 2012 · 101 posts · 17 votes
    13y

    James, please keep us posted as to if you use the seller finance process, and how soon you sell it. Best of luck, and have a Merry Christmas!!!

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  • Mike H.
    Rental Property Investor · Manteno, IL · Member since 2009 · 2k+ posts · 2k+ votes
    13y

    Could it be something as simple as it actually is the holidays right now? Very few people want to move during this period (thanksgiving thru the new year).

    I'd hold off til January and see if the simple timing of your offering isn't the issue. Seems pretty odd that the other couple chose the other model for 3k less with all the headaches that came with it.

    I agree with the ealier post though and I would ask them.

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  • Curt Smith
    Rental Property Investor · Clarkston, GA · Member since 2012 · 2k+ posts · 1k+ votes
    13y

    @Seth Williams

    Ken Rishal was very under stated in his comment. The Safe Act is a big deal!! And few investors are up on what it means for seller financing including CFD even lease option if the option period is longer than 3 years are falling under the Safe Act.

    Here's a thread on MH lending: Lonnie deal lending

    It's hair raising! Some have used the libertarian refrain that Gov doesn't belong in my real estate deals. That maybe true, but the State Banking divisions have fines as their reason to go after enforcing the Safe Act.

    I'm doing owner financing of houses which is a different set of issues than mobile homes and being Safe Act compliant is difficult but doable at least and I'am working on a plan to make it easier thanks to an idea Ken offered me.

    Seth is right about putting owner financing in your ad will get you a flood of buyers! You are in a squeeze for the monthly payment given such a high land rent cost. This is why I gave up on lonnie deals in addition to the safe act.

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