All Forum Posts by: Bill Neves

@Jen Faulkner

Howdy. Going in as a couple has worked well for my wife and me. More personable. They can make or break working in that park. We have done several very nice deals in parks at the manager's referral. Some were from the manager and park that needed work. Some were a referral to go talk to a resident interested in selling.

We do almost all our deals for cash so no Dodd Frank issues. And if financing is needed, there are several companies who will finance mobiles in parks. Google search. They finance the purchase, so you're out of it.

One mobile home private lender in my area has his own mortgage loan originator who works exclusively for him. You can also get help at your local real estate investor club.

Have fun!

@Orlando Paz @Harold Anderson Hi Harold! @Howard Abell

This is a people business. 

Advantage of a park - lower entry fee. You are not buying the land. I've done many MH deals in parks. I've bought several thru the park manager on a referral. I've gotten them for $1000 including 1 month rent, $500 including 2 months rent. I netted $9500 on both of those. I'm going to look at one tomorrow that I'm pretty sure will be $500 and at least 2 months rent thru a park manager.

A friend of mine has gotten them for $1 thru a manager he knows. Yes they need some work but not like a rebuild. If it is, walk away.

Had I not cultivated a relationship with park managers/owners, those deals would have gone elsewhere.

For these reasons, I like to get to know the manager and/or owner.

Disadvantage - You are at the mercy of the manager/owner. This can be a challenge. See below...

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

You can go 2 ways. Probably more ways but...

1 - You can be the bank. Take over a home, send the park a letter that you've taken over the lien. Just like Bank of America might and update the home. Then sell it. That way you don't have to qualify in the park.

2 - Better to get to know the park manager/owner. Why? You need their cooperation. They must approve people to buy and live in the home once you're done.

Caution: Again, you are at the mercy of the park manager/owner. I've had good luck with ALL BUT ONE park. The owner seemed fine when I started working in the park. However, over several weeks became more and more demanding and less and less cooperative. 

i.e. - Had an outside inspection of required updates. Then later wanted me to add a fence.
Wanted me to change the metal roof to shingles, even though the roof was in excellent shape. Etc.

Then because I said the outside inspection didn't have those add ons, she became very tough to work with. I sent at least 20 people to get qualified and there were several 'reasons' why they didn't qualify.
* 1 couple was required to neuter their dog. They refused so didn't buy.
* Another single female, 19, was only on her job for 6 months. She had $80k in the bank from an inheritance and offered to pay a years rent up front. But was turned down.
* One couple from Mexico didn't have the 'right' paperwork.
* 3 of the couples bought a home from the park owner instead of me after I sent them to the office to get qualified.
ETC

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

Had to play a little psychology - I finally told the owner, I just wasn't cut out for this business and I was going to pull the home out of the park if I didn't get someone qualified and 'magically' someone I sent the next week, got qualified. This just happened a few months ago, Feb 2015.

AGAIN this was an isolated park. I've since done 6 in other parks. So just do your due diligence and avoid incidents like that park.

For me, mobile homes are a great business. Low cost of entry and better returns on the investment dollar. But not for everyone.

Have fun!

@Doron Rice @Salvador Senar Jr. @Denny C. @Tim Ball

I'll chime in here, too.

I have purchased mobile homes on land, or city lots, also.

I mostly do mobile home in parks. I know many investors who mostly work in parks also. Why?

Much lower cost of entry starting out and ongoing. Last 3 deals I did netted very nicely and had awesome ROI. I sold them for cash. I've been marketing for cash buyers and the current market is supporting that. Not everyone has the cash. I sell to those who do. :-)

I could sell for a higher price if I financed. Leave something for the next person. Pigs get fed and hogs get slaughtered, right?

It's also very much a people business. Park owners and managers can be a pain. I've learned the hard way to do my due diligence. So I only work in parks where I have a good relationship. 

As @Curt Smith mentions above, one mobile home on a lot, I own, and with a rent to own tenant has comps right at $100k. I got it for a lot less in a foreclosure, distressed purchase. Not every buyer can qualify for this purchase option, though.

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

I can buy, fix and flip between 5 to 10 mobiles in parks for the same $100k. And my returns are much better.

Financing is an issue.

The Dodd-Frank rules and regs limit how you can do financing. I work with several investors who deal almost exclusively in parks, with financing thru traditional and private lenders. 

i.e. One local investor who is doing current mobile home deals, not 5 years ago, uses a Mortgage Loan Originator to qualify people and charges 24%. I thought that was high and grilled them for over an hour on the particulars. 

They ask people to PLEASE get their own financing. It is a higher risk so the rates go up.

It is not usury and people are happy to get the loan when traditional lending won't touch the project. They still need a 650 credit score, no felonies no evictions, to qualify in most parks.

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

NOTE: Please save the ripping about high fees, gouging, predatory, etc. 

Current economy is dictating these loan rates, just like hard money does for non traditional investor deals. People who want to buy a car will sometimes pay 27-39% if they want the car. It's the market. Mobile homes in parks are bought and sold just like cars, with a title just like cars, in most states.

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

Approx 10% of housing is mobile homes. Home ownership is at the lowest rate since 1972. 

People, generally, are having increased issues with getting loans. Can't fog a mirror and get a loan any longer. Recently lost a home due to the real estate crash, working part time or 2 part time jobs due to economy, self employed, etc. Their options are rent, with prices climbing. Construction is still behind demand. Do landlords ever raise rates in a short supply, high demand market? 

In my area Portland, OR a 1 bedroom apt in a multi-unit building averages $900/mo with no private parking IF you can find one at that price. Local parks are $400-$700/mo for space rent.

Mobile homes sell anywhere from cheap at $5k to $100k in this area. Higher in other areas.

So a person, couple, family can buy a mobile in a park, pay off the home and pay half the rent they would in a common wall, apartment. And they own their own parking, yard, 4 walls and ceiling. No people running in the apt above them or down the hall.

Which is better?

Not sure if anyone has noticed but the world is changing. AND people can still get the 'new form' of home ownership. For many that's a mobile in a park.

It's not a lay down, easy business. It takes work. I know some won't agree with this type investing, but it works if you work it. 

Please read my NOTE area above.

Have fun!

Wow! I just saw the start of this looooong thread. I have done almost 200 real estate deals and several were wholesaling. 

A lot of investors are interested in cash and cash flow. Wholesaling generates cash, yes?

It may be true that

"wholesaling is not a form of investing in real estate..."

but please don't tell investors that. It'll be 'our' little cash generating collective group secret. 

My guess is this thread was started to generate conversation and controversy, which it definitely did.

Have fun!

@Christian Paul

Your profile says 'new to the industry'. You definitely can buy on payments. Several ways to do that.

If the mobile home is new enough, you can finance it through a traditional company, like 21st Mortgage and others. Just Google 'mobile home financing' and you'll see several.

OR a cheaper way to go.....

Ask the seller if they could take some money down and payments for awhile. Unlimited ways to do this. Rent to own, lease option, etc.

Attend a local REIA (Real Estate Investor Association) meeting in your area. They're everywhere. Introduce yourself and ask for someone to assist with paperwork for CA in order to do the deal. CA has some specific paperwork.

Have fun!

@John Oitice

Hi John. If the ones you're looking at need $3k in upgrades you should be able to get them for a couple thousand. Offer lower and work up if no go. Worth a try?

A couple questions I might ask. These would work for stick built also. Some of these can be first visit. Some on follow up:

What do I need to know about this trailer?
(We buy trailers and sell homes. Psychology.)

If you were to fix everything that needed fixing, what would those things be?

How much are you asking?
Nicely follow with: How did you come up with that number?

Seems like a nice place and you must like it, why are you selling?
Find out what they need and figure out how to give it to them.

If I could pay you all cash what's the least you could take?
Nicely follow with: Is that the best you can do?

What are you going to do if you can't sell it?

Are you open to maybe some down and payments?

Have fun!

Hi @Scott Harper

You can definitely do this as an investment. 

A couple things to check on. There may be others:

1 - Make sure you can rent in the park. A lot of parks have rules that the residents must be homeowners. No renting, lease/options, etc.

2 - Is it a 'senior' or 55+ age park? Important since residents must be at least 55 to live there. Since your friend's relative passed, that may be the case.

3 - Talk to the park manager and find out the rules before moving forward.

4 - Also regarding rent, depending on the area, it can be a few hundred to $600 or $700+. So check that first also. Does it include water, trash, sewer? Some do, many don't.

5 - What's the condition? Does it need any work? If so, how much?

6 - Is there past rent due, back taxes due, etc?

7 - Florida has a seasonal, snow bird population group. For instance, several parks in Phoenix are 95% vacant from May - Oct. Make sure you don't have it empty for several summer months. Paying rent on an empty mobile home, gets old fast. How do you think I know that?

Do some due diligence so you don't take on someone else's problem.

Have fun!

HI Dave and Cindy!

Addendum: Another avenue for funding is doctors, attorneys, business people outside of real estate, etc. 

My chiropractor asked me what I did for work when he adjusted my back as a new patient recently. He has 4 offices and opening 2 more.

He said he's always looking for additional money investing deals. I use a 'take away' instead of chasing people. I told him he's so busy he doesn't want to mess with this business. He said if I can show him a couple case studies, he wants to be involved. Then he told another doctor in the office and he is interested, too.

He now is a potential money partner. We have not done a deal together yet but he's ready to go.