All Forum Posts by: Gail W.

Here in Central Illinois the assessed valuation is somewhere between 28 and 33 percent of the actual amount that property will sell for. 

@Jerry Lucker

I was not sure about NADA/ Kelly valuations, I have never used them,

I was just aware they existed. The two mobile homes I mentioned are the only ones I have ever owned, except for one that I bought many years ago sitting on a lot which I was able to resell the trailer for the price I gave for the home and lot. That deal was only luck. I consider myself a newbie investor. I first got into residential REI last year. before this I have traded some land. The comment you made about buying cheap and renting then selling on contract is interesting. I will consider this as another exit strategy. Thank you so much for your comments. I am here on Biggerpockets to learn.

     NADA and Kelley Blue Book both have values for mobile homes. I don't know since I only invest where I live (central Illinois) but I would suspect values are very local. I have 2 mobile homes one was given to me because the couple who owned it needed it moved to make room for the new one they bought. It is a 1989 that they had been living in but it had some problems. The other I just bought for $500. I own a lot that the city will allow me to park a mobile home on and I estimate about $8000 in renovation costs. It will cost me $1000 to move it 5 miles. It's a 1990 Fairmont.

Also this unit is just the first year after the HUD safety laws came into effect in 1976. Mobile homes after '76 are better build quality and safer homes. I personally would not invest in something before model year '76.

      One last thing I don't feel like mobile homes are a real good buy and hold play because they are going to depreciate. I am using the cash flow from the two I am holding to pay off the land they sit on. I consider the mobile home disposable.

@John Bell

I had a similar situation years ago. I had made a deal on a farm to buy on contract. Neither of us had an agent or attorney. She had hired an attorney to draw up the contract and he informed me at closing that the lady had changed her mind and needed to raise the interest by a point and half. Now the whole deal for me was based on the fact that the interest was below market and I had agreed to a higher price for her property. I had no idea what I was doing, but I was offended because we had agreed on price and terms verbally with a handshake and then a signed contract. I thought I had lost the deal so I simply stood up and left the room. The attorney stopped me out in the hall and we closed the deal that day with the original terms.

That situation was different than yours though because it would have cost me thousands over the course of the contract. I only brought this up because I learned that day that negotiation doesn't stop until the deal is closed.  

Something that no one else has mentioned, here in my market (Illinois) taxes for a new build would be 2 times as much as buying an older house in rent ready condition.  

I consider myself a newbie, however I bought my first 2 properties in 2019. Here is the story.

The first was a 2 bed 2 bath house in the town I live in. It belonged to a lady who had lived there then moved and rented it for a time. She was in the process of rehabbing it herself, and she had no experience at all. I asked her to give me a price if she stopped work on it right away. She did and we made the deal. The bathroom rehab was done, and there were new floors in 2 of the rooms, she also left carpet for 2 more rooms. I gave $30000 for the house. After closing I got the keys and went into the house, the brand new laminate in the utility room had popped and was ruined, I pulled all of it and found the subfloor was wet, turned on the water and the water heater was leaking. So I replaced the floor down to the foor joist in that room, and a new water heater. Next I turn on the power and find I only have power in half the house,(bad leg on incoming) then I find there are broken water lines under the house, and none of the brand new fixtures in the bathroom had been hooked up. Sounds like a disaster don't it? It really was not I repaired all of that painted walls and ceilings, and refinished the cabinets I spent $7000 total. The house appraised for $44000 so I have to leave a little cash in the house after refinance. I have the place rented for $540 a month which gives me a small cash flow. I am happy and this was a very cheap lesson. The lesson? Stay with it, overcome the obstacles, and keep your cool.

The 2nd property. I was offered a mobile home a young couple were living in, no charge I just had to get it moved within 60 days because they were getting a new home. I knew of a lot for sale 3 blocks away which had been for sale for a couple of years because it was over priced. I paid a premium for the lot and moved the home. I have a total of $12000 in the deal and the place is rented for $500. The lesson? recognize a good deal then act quickly.

The best way to determine what size units you need is to do a form called a manual J. It takes into account what size and type of windows you have, where the windows are located, insulation in the walls and ceiling, the type of construction etc. You can google manual J and find something on the net. However I have used a rule of thumb of 20 btu per square foot for air conditioning in a decently insulated house with good windows, and 45 btu per square foot for heat. This works pretty good in my area, which is about 350 miles straight North of Memphis. Those numbers would be a little high for your area. Remember that this rule of thumb is only an estimate. It will get you in the ball park. Your contractor should do a manual J for you and furnish you a copy. After looking at a few of them you will soon get a pretty good feel for what you need in the future in any other property you might be dealing with. 

There is a laundramat for sale in my area. I have given some thought to it but I am not sure how to arrive at the value for something like that. What I do know is the commercial lot is worth about 70% of the asking price. This would be a pretty big step for me as I am just a small investor, so i want to be confident in the numbers. Any advice would be appreciated.

@ Anthony Dooley. Thank you for the encouragement.

@Angie Shires. I am still exited! I don't have one lined up yet but I am looking at a couple. I am going to try to contain my exuberance this time though.