All Forum Posts by: Mark Gruetzmacher

Welcome to BP.  I am from the West side of the State.  Check out all the good info here on BP.  Lots of good people on this site as well that can help.

@Lukas Gordon  Most places mobile homes are treated just like cars in regards to titles.  It is a paper title you just sign off on to sell.  You would need to check with the county to see how the chain of title can go.  For example here when you buy it they want you to pay the taxes current and transfer title to your name.  They DON'T want you to buy it, NOT sign the title and then sell it to another party.  As far a taxes here they want them paid current which usually means you are paying the last years taxes plus the current years as well since usually they are paid a year in arrears. If it is after Nov. here you have to pay the next year as well so that means a total of 3 years.  Again varies state.

Another issue is the lot rent where it is at.  Maybe back rent is due from the park, or maybe they want it moved, or maybe they won't let you buy, and then resell.  You have to talk to the park to make sure what they require.  

There are lots of WHAT IF'S I think.  Hope that helps some.

@Jae Cunningham I have to agree about the inflated market. Prices have gone up a bunch just in the last few years I think out here in the Rapid City market. I totally think that the buy and hold market is tough out here. The rough/bad areas of town the prices are all close to the $100K mark and since your in a bad area the rents suffer as well. I have looked at duplexes that are in the 80-100K range, the numbers were tough then which was a year or two ago. By the time you accounted for all the expenses and then based it on a 20yr loan which was most what places offered for investments, then numbers were too thin. I was talking to another BP member from the area and he was looking at a duplex as well but by the time I explained the numbers why I wouldn't do it he passed on it as well. Again it is tough I think. If you ever want to catch a lunch or just a soda or something hit me up. I am always open to meeting new people from the area. Sure wish we had a REIA out here or local meet up.

I'm in the area as well.  It is a tough market  here I think.  It's nice to see a few people on here from the area.

@Brenda Snyder I meant taxes of the mobile home.  The parks themselves would have property taxes which the renter of the lot would not see at all.  I am talking about the taxes on mobile home itself.  There is no way a park would have those built into the lot rent.  Unless that park does something totally different than most.

For example when I bought this recent mobile home.  I called the treasurer up and asked "Are the taxes current or are they behind" and also ask :what the approximate cost in taxes will be to transfer ownership".  Our taxes are due in April and Oct. here and depending on when you by them all or part might be paid.  Almost every home here are paid a year in arrears.  So now in 2016 the taxes that are due are for the 2015 year.  The county makes you bring them up to the current year being paid, so in this case the taxes for 2015 and 2016 have to be paid to transfer title.  Most people will say they are current but in reality they are not current to the actual date you buy the home and you have to prorate that and make them pay their portion.  Here also if it is after Oct. of the year, you have to pay the next years taxes also, so in this same case you would have to pay for 2015,2016, and 2017.  Again this is my state but others I have seen do it the same way. Maybe someone else will chime in also.

@Brenda Snyder Doesn't sound too bad for an 88 Double Wide.  If there is minimal repairs that need to be done then it might work ok.  Since it is in a park, you are at the mercy of the park owner or manager.  I would get something in writing stating that you are allowed to rent it out.  As for seller financing, that is a tricky issue and pretty much illegal if you do not follow the rules of Dodd Frank and the Safe Act. Owner financing has dried up compared to what it once was.   Lots of info here on BP for that.  The $506 lot rent is pretty high but that might be your market.  If you rent the home out, what is the rent going to be?  You want enough left to make it worth while.  Since in most states mobile homes are treated as personal property like cars and have titles the same, you will deal with the county treasurer. With that said you should check into what the county does for the taxes.  Usually you have to bring the taxes current to the year it is sold if it is paid a year in arrears.  Also usually you have to take title in your own name, do the paperwork, pay the taxes, and get the title back before you can sell it.  You usually can't buy it and skip ownership, the county will have nothing to do with that.  Now at least that is the way it is here in my county.  Again yours might be totally different.

@Jabri Carter  Mobile homes are for sure a different type of investment.  Like every one says they go down in value which is a down side.  I think it depends on your market and also the price of the home itself.  As for value, they are all over the board based on market.  For example in TX I have seen some pretty good deals compared to my area.  They sell all over the board and my market the old ones still bring more than I would pay for them.  Usually stuff in the 70's bring 5-15k, the 80's vary from usually 10-20K, The 90's are over 15k, I don't do anything  in the 2000's.  Those prices are for homes all in the parks.  We don't have much out here on their own land.  If you can find cheaper ones that are rentable and not junk then you can rent them out if you can find a park that allows it.  You have to make good cash flow to get the home paid off so the money coming in is cash flow.  Tenants can be tougher but the ones I have now are good.  But your options are slimmer with mobile homes I think.  You can make it work if you want.

@Nathan Peatrowsky  What's the address?  There is a brown up and done duplex on the north side for sale, on Lindbergh.  Is that it?  722 seems like an odd amount, maybe it is section 8?  Seems like a lot of those smaller duplexes rent from $500-650, all are usually not in the greatest of areas and the tenants are usually the same.  When I looked and talked to local banks, all of them only wanted to do 20yr loans and 25% -30% down.  If you go by the 50% rule, that says 50% of your rents should pay the mortgage.

$722+675= $1397.00 divide 50% equals $695.50.  Your payment will be close to that or more.

You have to take into account vacancy, repairs, cap ex, prop. management, and anything else.  PLus you want to make at least $100 per door.  So that gives you an idea. Another thing is to check who pays the water,sewer, garbage.  If you have to then there is more out of the budget. 

Yeah I manage my own right now.

@Nathan Peatrowsky  I would double check the rental history and rental amounts.  If you don't mind me asking, what side of town is it on or street.  Just curious, then rents seem a little high compared to the price for around here in RC. 

 You mention you have 10% for a down payment but leverage if it appraises for more.  From my experience the appraisal price has no bearing on your down payment amount.  Most lenders require X amount of down payment based on purchase price or appraisal which ever is lower.  So if it appraises higher doesn't help.  At least that is the way is used to be and maybe it changed.  Just something to consider.

I would look at the rental info like you mentioned.  As far as security deposits, verify from the leases what the amounts are and at closing the seller needs to give you the deposit amounts so you can hold them for when the current tenants move out.  

As for offering, if it is a private seller you guys can go back and forth and come to an agreement.  If it turns into a seller finance deal then you could go to an attorney and have the contract drawn up.  I know one in town here if you need one.  You can always call a title company as well and ask them. You will also have to decide on who is going to pay for the title costs also.     

If you want a 2nd set of eyes or want an opinion let me know. 

Hello Jared, Welcome to BP.  There is alot of good info on this site along with alot of good people as well.