All Forum Posts by: Mark Gruetzmacher

On the whole lot rent thing.  Who is ultimately responsible for the lot rent if you buy a mobile home where the previous owner owed back lot rent? 

@Megan Arzt I agree with what Jeffery said. Depending on the condition of the home it may or may not be worth it to move it. Moving cost here can vary a lot. Sometimes it depends how hungry the mover is for money. I just got quotes here for $1800 to go about 15 miles. When the same mover last year moved one for me 35 miles and it was $1600. I already contacted another guy that is located about 30 miles out of town and he told me about the 700-800 range. So that really depends. Along with moving one you have the cost of skirting it, hooking up the water and sewer lines, and running electric lines to pedestal. As for the value, you need to check around your area and compare homes. There really is no set value, it is usually dictated by your local market. Around here prices are high I think. For a 78 14x70 3 bed 1 bath the prices can vary from free or cheap $1000-2000, all the way up to 15k-20K. Depends on what park they are in and their condition. Granted the free ones are usually only good if left where they are and not moved. Sometimes you can find a good one cheap that someone just needs to get out of too. Another thing is that some parks and also some cities have restrictions on the age of the home as well. Since the codes changed mid year in 1976 , HUD started regulating homes , a lot of places want 77 or newer homes at the minimum, some parks want 90's and newer. Again it all depends. Just start checking around to get a better idea of your area.

@Stan Kyle Mobile homes are a great start I think.  I started that way.  Partly because of the capital needed was smaller.  The returns are great for me as well.  Another reason is that in my area homes usually rent for .75 to 1% of the purchase price.   By the time you take out expenses and such it is pretty slim margins.  In mobile homes I can buy them for $5K and up, granted you don't get much for that but sometimes you can find deals.  I have found some deals for sure.  My area they bring a higher dollar amount than what TX does.  I know I used to see all sorts of deals in TX.  My sister lived down there so I used to look down there just out of curiosity.  Like @Andriy Boychuk said the seller financing is a tricky thing.  I sure wish I could seller could do it but right now I am not sure I want the risk and I have no idea if there is even an RLMO in my state let alone my area since we are not that populated.  Find parks that will work with you, that's the hardest park.  Then find a home and go from there.  If you have any questions just ask, good luck and happy investing. 

On that website, there is no metro size/area.  The closest large town is where I live at (60 miles away) around 70K with a metro size of 129K.  House prices are 85K there and it says 2 bed rent is $741 which I think is really high for that area.  I need to call and talk to some realtors there or check on some housing to see what the cost of rentals are there.  As for the value of the homes included, I wasn't going off what they owed yet, sort of going off what they usually go for around here.  Rents might be a little low but rents usually are in the smaller towns outside of my metro area.  

1. Ok here is an update with a little more info.  The park is 17 spots total with a small 16x16 (estimate)  metal building for storing stuff.  It is on City Water and Sewer with a master meter for the whole park.  Water,Sewer, Garbage are charged to the tenant in the lot rent price. So right now it breaks down to $140 lot rent and then $60 for water,sewer, garbage for a total of $200 lot rent.  Here is a break down of the lots.

• 17 Spots total which consist of the following.

1. Lot1- Privately owned home collecting $200 lot rent
2. Lot2-EMPTY
3. Lot3-EMPTY
4. Lot4-EMPTY
5. Lot4A-Private owned home collecting $200 lot rent
6. Lot 5-Home sold on payments with about $15,000 due $200 lot rent plus $350 payment toward the 15K
7. Lot 6 Park Owned 70's model collecting $200 lot rent and $225 =$425
8. Lot 7 Park Owned 80's model collecting $200 lot rent and $300 = $500
9. Lot 8 Sold on Payments getting $200 lot rent and $300 toward payment Not sure on balance left.
10. Lot 9 - Vacant-Home owned by park and need fixing up to rent.
11. Lot 10 - Park owned 70's model  collecting $200 lot rent and $225 = $425
12. Lot 11 - Private Owned collecting $200 lot rent
13. Lot 12 - Vacant-Home there but the people abandoned it. Need to check into this issue.
14. Lot 13 - Private Owned collecting $200 lot rent.
15. Lot 15 - Park owned 70's model collecting $200 lot rent and $300 = $500
16. Lot 16 - Sold on payments with balance of $3700. $200 lot rent and $300 payment towards the $3700.
17. Lot 17 Park owned but renter might by it on payments $200 lot rent and $300 =$500

Land taxable value is $72910.00 and Building and homes owned by the park is $38610.00 per county records.

Total property taxes including the homes is $3558.00

Liability Insurance  $714.00 / yr

Mobile Home Ins.  $1135.00 / yr

Water/Sewer Bill  $5900 / yr

Trash Bill              $1900 / yr

All homes have their own propane tanks as there is no natural gas in town.  Tenants pay for their own gas in the tanks.  Park pays for the tank rental of like $50/yr per home so that's another expense.  Electric is all separately metered as well.  Water is a master meter and each home has a curb stop that I can shut off or turn on.

My thoughts would be to try to find homes to go into the 3 Empty lots or get people to move homes into the lots.  My thinking was to find home myself so I would have more money coming in but that does come with more work on my half.  On such a small park the lot rent alone would not amount to much.  Since it is a small town, rents are cheaper as well so there is not much there and I wanted to make the most of what I could out of it.  I have homes in parks here by me but there is only a limited number of parks and lots open I could use then I am stuck.  My rents are larger here so the gross profit is better but limited like I said.  At first she wanted about $175K.  Then she told me this in a message "Also Mark ignore the price I was hoping for. After you have time to look over the paperwork with the income, just make me an honest offer, I'll consider".  So I think she is a little open to offers.  Not sure what she will do for an owner carry, not sure on what interest rate either or term.  I assume somewhat of a shorter term, under 10yrs I would guess since she is wanting to retire.  With the homes that are there and the balances left on the homes she sold I think you might be looking at about $30-40K of value there if you were to sell them.

With that info what do you guys think?

@Christopher Abernathy The others are not that great of a story as this one was but here goes.  My primary purpose for these are for rental purposes.  I have another 97 16x80 3bed 2 bath that I picked up about a month or so after this one.  I have about 15K into it and it has been rented for a year grossing $500.  Still needs some work. Could sell for maybe low 20's.  Then at the end of Dec. 2014 another month or so after this I bought a 1999 28x60 double wide on a basement on an acre of land..  Picked that up for a deal under $40k.  It was a foreclosure and had water in the basement due to no power to the sump pump and 4 inches of rain the spring before.  Water was gone when we bought it but the basement was ruined.  We gutted it all out and it is open now.  Been too busy to do much with it down stairs but the upstairs is fine.  The home itself is having new carpets and cabinets in it and painting.  I actually co own it with my sister and she is going to live there for now as she moved back from TX.  But we plan to rent it down the road for somewhere in the $1000-1100 range or sell it close to or over $100K.  Meanwhile she will pay half the rent cost.  In the end it was a great investment.  Last summer I bought a 2003 14x56 home at a sheriff sale.  It was bought without seeing inside and let me tell you it was a mess.  A hoarder lived there and she kept everything including the dog poop.  Yes that is correct, dog poop and papers piled 3 ft high in a pile in the back room.  It was disgusting to say the least.  The long and short of it though is it was cleaned, painted, new flooring and cabinets.  Bought for under $4K, put maybe $3-4K into it and got it rented out for about $425 gross.  It is actually about 15 mins outside where the others are and that is why the cheaper rent.  Home could sell for $15-20K.  Just bought another last week, a 94 16x80 3 bed 2bath shingled roof.  Nice looking outside.  Inside needs work.  The guy wanted 10K for it but after about a month he just needed out as he bought it for $6500 and put some work into the painting the outside and doing some work inside.  So I bought it from him for what he paid minus some back lot rent he owed and also some taxes for the 2016 payable 2017.  So in the end it was close to $6K that I got it for.  With a little work it will turn into another decent buy.  I can't rent it where it sits as the park won't allow so I might move it to the same park as the one from my post and rent it  or fix and sell it.  Not sure yet.  

So as you can see some decent deals and some not.  But overall that is what has happened since this deal in the last year.  Looking at a small park right now but not sure it is worth it.  It is hard to determine if it will work or not.  So it has been a busy year for me and I hope it keep going.  Happy investing.

@Roland Thomas  I think it is a decent way to get into investing.  As mentioned before you can't really do owner financing like you could before the SAFE Act and Dobb Frank.  Depends what your goal is also.  In my market if I buy right I can flip after fixing them up for a profit but I prefer to use them as rentals.  I have a couple parks that allow me to do that which works for me. 

@John Turner As an update, I still have the mobile in the park.  It looks great.  Ended up redoing most of the inside but in the end it turned out great.  Thought about selling it as it could bring more than I thought but still plan to keep it and keep it rented out.  Gross is over $600 so I can't complain.  Picked up 3 others in the meantime and have them rented as well and working on a few more deal and maybe a small park.  I need to create a blog or put up some before and after pictures somewhere.  

@William Noel @Andriy Boychuk @George N. Thanks for the  replies.  I was hoping for a reply back from the seller.  She gave me her email so I emailed her asking to give me some info on the park rents, trailer info, trailer rents, etc.  She might not check her email daily either so I will give it a few days.  Might have to take a drive there and meet up with her and get some hard info.  

One of my concerns would be managing the park since I don't live right there.  She said it runs pretty smoothly right now but who knows.  I am just over an hour away.  The more you think about it the tougher it sounds.  My market is tough because the city is not that big and the next largest city is 6 hrs away.  Our whole State population is only 850K.  Prices here locally are high and the rent are barely 1%, usually closer to .75%.  That is a lot of the reason I stick to mobile homes and now looking outside my local area which consist of just a handful of tiny towns.

 If this was in my local area it would be pretty expensive.  I know of a 12 unit park selling for over $350K.  I think she is looking for about 200K with maybe about 6-7 homes included.  Not sure on rent but those homes I am guessing would bring in at least $500 each. Lot rents I am guessing are good at the $200.  My local market lot rents are about $250-350.  I know lot rent in the small town about 10 miles away  from me is $125.00 so they do vary.

The park is has city streets are 3 sides of it that are paved.  The park roads are basic gravel from the aerial pictures I could see.  Looks to be classed as Urban Commercial according to the county.  

Thanks again for the replies.

Hey everyone,  I wanted to get some thoughts this from you guys.  I usually just buy mobile / manufactured home and either fix and flip or use as buy and holds.  I came across a lead today on a lady that was looking to sell a couple homes so we got to talking and it turns out she owns a 18 unit MHP in a small town an hour away from me.  As it turns out she is either wanting to sell the homes out and then sell the land or sell the park as a whole.  Said she owned it since the early 80's and is just tired of it and she is no getting any younger.  It got me thinking about the park but I am not sure what questions to ask or what look  for.  Not sure on the details yet but below is what I know so far. 

Small town under 5K people

18 spaces with 3 empty's

Of the 15 occupied spaces the owner owns maybe 8-9 of the homes themselves

Of the homes they own, most are 70's I think with in the 80's and one 2000.

She mentioned that she is selling some of the others on payments to the tenants

There is a metal  maintenance building on the property as well.

Lot rents are $200

Park has city water and sewer with shut offs for each home. I am thinking it is master metered.  I think new lines were done in the late 80's

I am thinking the water, sewer, garbage is in the park rent.  Not 100% Need to ask.

Owner is open to owner finance but not sure on the terms maybe  under 8% but I think they are looking for a big down payment.  $50k-75K  No idea on any other terms.

I need to get more info obviously. I was mainly talking to her in regards to the homes she was going to sell but then got to talking about the park. What kind of CAP rates do parks usually have? What kind of value is it worth? Does land value come into play or is it all jus CAP rate and NOI for the value? Ideas? Thoughts? Questions to find out?

Sorry this post is kind of vague.  I really appreciate any info anyone can give.