All Forum Posts by: Bill Neves

Thanks @Thomas Bybee

Howdy @Victoria Lorick

You can check with city and/or county building department on code requirements. Mobile homes have different requirements than stick built houses. But some permitting is required... in some areas.

Here's what can happen: 

Though not a mobile home, I currently have a rental in which I had a code challenge. In 2004 I bought a 1300 sq ft stick built house, for a rental, that had a family room add-on. I understood it was up to code. It was 2004 when things were rocking and rolling and we financed it. The loan company, realtor, title, etc and we all missed that no permit was ever pulled. 

In 2012, when it was discovered, the city inspector said it should be easy to just buy the permit and be legal. City inspector didn't issue permits. DARN IT! Permit people had different ideas.

Requirements - Blueprint, remove ceiling, walls, floor to bring insulation up to code. Move a window and a door and redo the roof. Decommission an old septic tank that we didn't even know was there since we were on city sewer. Yikes!

The city started fining us $550/mo for NOT being in compliance on an $1100/mo rental. We had an adversarial tenant who threatened to sue me for harassment, unsafe housing and endangering his family with code violations. All this was bogus. This was in Portland, OR. Very tenant friendly and not very landlord friendly area.

Attorney time and 18 months later: It was going to cost $25k to bring the room up to current city codes. If a permit had been pulled when built, codes were less stringent.

Result? We paid the tenant $1000 to drop any claims and move. Tore the room off and now we have a 900 sq ft rental. Still cost $10k to tear off and finish to be up to code on what we had left.

I resold it as a lease option so no potential tenant issues.

Again - this was a stick built, not a mobile. Mobiles have different requirements, etc.

So.... due a little due diligence to avoid any headaches down the road.

Have fun!

@Trevor Zimmerman

Lots of parks will not allow renting. Residents need to be owners. Some areas will have parks that allow it i.e. Florida, and elsewhere, has parks that allow rentals. Just have to check your area. You can go talk to a couple park managers in the area.

You can invest in the ones that require residents to be owners. Buy, fix, sell. 

The ones that require residents to be owners may require you to qualify in the park, like anyone else wanting to 'live' there. Even though I have bought and sold several in parks and haven't lived in any, several still required that I qualify. 

Background check usually includes checking for past felonies, evictions, credit and proof of income.

Have fun!

Sorry to hear @Orlando Paz

Good way to get into investing in mobiles. 

NOTE: Older than 1976 could have some code issues that 'may' need to be resolved. 'May' because if you disclose that it 'may' have code issues you 'may' not have to fix them yourself. My state has a form we can use. Not sure about where you live.

Ping @John Fedro. He works in Florida so knows what's happening there.

Have fun!

@Chris Reeves

You just were at the event in Seattle. Cool! 

You probably met @Jerry Lucker and @Robert Burns while there. We're friends. They have a great business model. Different but works for them.

As @Belinda Lopez says above -

Frank has a different business model and niche. And it is working awesomely (is that a word?) for him and Dave.

If it ain't broke...right?

Frank and Dave buy parks and the units aren't worth what they are for me one at a time. I'm small change to his high dollar deals. That's all.

My niche is just different. I'm comfortable doing this and it works for me. I would like to do a park but that's a bigger bite than I want to take at the moment. And I haven't been the MHU! :-)

Have fun!

@Bobby Mitchell

I work hard... At doing very little work. We hire out almost everything. I'm 65 so avoid work at all costs. :-)

I find and secure the deal. I schedule the crew and any work needed. My wife picks colors for staging and tile back splash, etc. She picks dark laminate one time and light laminate another time (if needed). We are finding that most people like laminate vs carpet. Easy to clean and keep up. Especially with pets.

We paint everything an off white and white ceilings. May do the outside, roof, gutters, deck, etc. Put it up for sale, sell and go on vacation. Last trip was a month. Then start another project. Next year Jan-Feb-Mar we're gonna be in Mesa, AZ being snow birds!

Have fun!

@Chris Reeves @Bobby Mitchell

Sounds like a good game plan. I buy, fix and sell used mobile homes. Just started one this week and sold the last one 2 weeks ago.

The economy and market have changed since 2008. A lot of people cannot get a loan for the time being. So instead of buying, they have to rent. Rent rates are going up. In order to own something, they buy mobiles. A lot of people are buying Tiny Houses. They don't need 3000 sq ft any more. By the same token, older mobile home units pull more money now and depreciation doesn't matter.

The last one we did was a 1970 went for $28k cash. 

The one before was a 1968 and went for $25k cash.

The one before that was also a 1968 and went for $17k cash.

The one we're doing now is a 1972. We got it for $5k. Will put ~$5k in it and will sell for close to $30k. We just started Monday. It will take 2-3 weeks to upgrade. We are in a mobile home park and the manager wants to know when it'll be done. They have a list of cash buyers who want to look at it.

You're on land. Different discussion. But similar. 

So depreciation is a meaningless conversation on older units. If you are looking at 2000 and newer, which you mentioned, and wanting financing, comps and depreciation are discussed. But the way you sound like you're doing them, probably won't be of importance. If you keep them up, they maintain their price.

Have fun!

Missed the square footage. Good luck with it. Let us know!

@Victoria Lorick

Sounds like an awesome deal at first blush. With 3 rentals. Wow!

Since it's advertised as rentals it is probably ok with the HOA but verify that as mentioned by Harold.

Probably can't get financing due to age of unit. No bank will finance older mobile homes. YOU could get a credit union or personal loan if needed.

A simple question would be "Would you be willing to take some money now and some later?" Then negotiate what that would look like.

Could be $1000 down and 36 payments of $X. Many times sellers just want their price and won't charge interest.

Could be $5000 down and $500/mo for X months. There are an infinite number of financing terms. Since you would have rentals you could pay it off quickly.

If you get financing from them, they may want full price. But go in assuming to get a discount.

Hope that helps. Let us know how it goes.

Good luck and Have fun!

Howdy @Eric Wallace and @Rina Amir

OK - a couple items...

1 - Is the roof metal, rolled roof material, shingles or ?
Metal can usually be repaired or recovered with a membrane. You can do shingles but entails roof joists and is costly.

There isn't attic space to get into. 

2 - Ceilings may be sagging due to walking on the roof and age and condition. Many times older unit ceilings will sag. Legally, you can only put 1 layer of roof on mobile homes due to weight. Many people put extra layers but not recommended and not legal.

3 - I don't know any banks that will finance a mobile home of this vintage. Market value is dictated by area, park, condition, etc. I've obtained them for $500 and after repairs sold them over $30k - same unit. I know several people who have gotten them for $1 ! Yes one dollar.

--------------------------

Condition is more important than age. I recently sold 2 that were older than 1976.

1968 2 bed/1 bath for $24,900

1970 2 bed/1 bath for $28,000

In some areas, you may need to upgrade the home to local code standards.

1 - Sheetrock around heater and hot water heater and within 6 inches of cook top.

2 - Egress (escape) windows in bedrooms.

3 - Electrical - older than 1976 may have aluminum wiring instead of copper and pugs and switches may need to be upgraded.

4 - Linoleum may contain asbestos and might need to be removed.

Hope all this is clear. If I confused anything, let me know and I can clarify.

Check with local codes for requirements. Building dept can steer you to right info.

In most states you register mobile homes with Dept of Motor Vehicles, just like a car and they can point you in the right direction, too.

Have fun!

If you already have someone interested, agree on a purchase price. Otherwise, Craigslist is a good avenue to sell. 

They would pay for the move, which can vary greatly by area. Some areas $2-3k. Some $8-10k. Depends on how easy it is to move, distance, etc.

If it's on land it may be real property (no title). In that case, you would need to put title back on, in order to move it. Any manufactured home mover can steer you in the right direction. Yellow pages for listings.

Usually the county will issue the permits to move and place it. Cost varies by county and again, purchaser pays these costs. County Treasurer usually requires that taxes be paid in advance.

Have fun!