All Forum Posts by: Tom Goans

@Keerthi A.,

I left out part of my thought on paying the delinquent HOA debt. If you pay this personally, YOU become the hero and make an outstanding impression to the board and fellow members. Forget the cost. If you are worried, or it is that close, deduct the amount from your offer.

Look at the bigger picture and what it offers you.

@Barry Taylor-Young,

Why would you want to be associated with this?

First, if I am reading your post correctly, this family willfully committed fraud. If this is correct, major legal issues may be looming.

It appears you are considering a loan in second position with the only very remotely possible security is the property. The borrowers have already proven they are extreme risks. I view this as an unsecured loan with the very high possibility I will not see the return of my investment, much less make a profit.

As an investor in real estate notes, this is a very unattractive investment.

@Michael Lleverino,

It is my opinion your idea is just setting you up for a lot of unnecessary stress and possible failure.

There is a very long list of other options for you to consider that can increase your chances for enduring success and lower your stress level.

@Keerthi A.,

There is no mention of the target market study. My method for investing and researching begins with knowing and thoroughly understanding the target market. The way I view investing, the target market is the cash flow or buyer. Without a the target market, the rest is just numbers on a page.

• So many times I have read in this blog of people buying a property, spending money to fix it up, and then discover they cannot find renters or buyers. NO CASH FLOW. Many cannot determine why.

I would caution about one subject you mentioned in your post; negotiating the HOA debt. Consider this; the HOA is your business partner that will always be a part of your investment until you no longer own the property. Do you think it is wise to begin your relationship with the HOA and all the other community members by not paying the full amount of the debt owed?

Everyone else had to pay their full fair share. Why not you? If you do not pay the full amount owed without hesitation, the other members may feel cheated by you.

You may want to begin the relationship on a positive note by walking in with a payment in full check, smile, and promise that this will not happen again as long as you are the owner of the property. This begins the relationship on a positive note. The delinquent debt is an associated cost of the investment.

• What goes around, comes around.

@David Mayfield,

I would only trust or consider inspection reports I conduct or hire done.

Your possible advantage is the investment opportunity and structure of the deal. I am more concerned about blue sky assumptions.

@Account Closed,

I am a third generation real estate developer with almost 50 years of experience.

I would consider your example an extremely high risk roll of the dice. There are so many pitfalls I could not list them. The whole scenario is based upon assumptions - guesses and hoped for dreams.

All this risk for what could be a very small or no return on the risk. There is also the possibility of losing every cent invested.

There are much better investment considerations in my opinion.

@Craig Jennings,

Knowledge is key to enduring success.

As a safeguard, I would recommend you first develop a history of experience in the various segments of manufactured homes. Do this locally. A great way to develop an understanding of the homes and target market may be to work for a local mobile home park, investor, or manufactured home community. There is a huge amount to learn and understand.

Lean everything there is to know about the homes themselves. Go to manufactured home shows and talk with the sales people. Act as if you are a buyer, not an investor just kicking tires and taking up their time. Learn the various ways the homes are constructed and financed. The homes are constructed in many different ways using very reliable forms to ensure more uniformity than site-built homes. Some homes are better built than site-built homes. Some have a stronger construction. Learn the ways to "setup" a home or to put it on a permanent foundation. Homes on permanent foundations may qualify for federally backed loans, such as FHA - there are rules that must be followed for this to become a reality. Know the rules and you broaden your options.

Study the target market. Learn all there is to know about the target market. Learn the best ways to market to the target market. Learn the best ways to set up payment plans and collect money.

I would recommend having knowledge of the product and target market long before investing out of your immediate area. Any long distance investing is extremely challenging, even for the best skilled investor.

Moreover, there are many very experienced investors with knowledge and history that are your competitors and may be your sellers. Level the playing field.

@Tyler Jenkins,

Please Seek Professional Advice from Licensed Professionals

Legally, legal and financial advice can only be provided by a licensed professionals. You should only consider legal and financial advice that is provided by licensed professionals. Any other legal or financial advice is ILLEGAL and may be very incorrect.

Seeking advice from an attorney in the area where the property is located can be a wise and very economical decision considering the alternative. An attorney will assure you are abiding by the federal and state laws. Every state has unique laws. The attorney will also provide the best advice and options for your specific needs with a consideration for your future. The results will be legally drawn up agreements for your use.

It is also wise to seek advice from a licensed professional tax and financial planner to make sure the agreement structure best fits your present status, strategy, and future plans - including building an estate. It is one thing to make money; it is a completely different strategy to building wealth.

Legal advice from an attorney and a financial planner you hire will be the cheapest and wisest investment you will ever make.

Moreover, every investment, partnership, and individual is unique. There is no one correct answer. There are numerous options that must be considered and many mistakes that need to be avoided. Dissolution is one many forget. Death, incapacitation, spouses, and children are others.

And, yes, you will disagree on the smallest issues. The courts are full of such lawsuits.

Seeking professional advice from licensed professionals can be an extremely wise and very economical decision considering the alternatives.

May your future be full of great success.

Thank you for the mention and support @Steven J. .

Dominick, I am a very strong supporter of investing in manufactured homes and related segments of the industry. The cash flow and return on the investment can be fantastic - almost unbelievable. Part of the reason is too many people avoid these highly profitable segments due to ignorance. The advantage to the investor in these segments is so many people avoid investing in these segments. This means less competition and false property inflation.

With that being said, I know some people who have become millionaires 100 times over in the business. Warren Buffet is an investor in the Champion Homes company. Another that comes to mind is a gentleman by the name of John Bushman who is from Odessa, Texas.

To your question, I would think wholesaling manufactured homes would be a greater challenge. I have never attempting wholesaling, so I am not the best source for an opinion. But, my experience does verify the manufacturing home related segments can be extremely profitable and present great cash flows with very little effort.

One word of caution, just like anything or any business, knowledge is critical.

@Aly W.,

I will begin with a statement my father continues to repeat; The first person to mention numbers loses.

This statement is extremely true and I have verified it many times. Many times I have bought property for a fraction of what I was willing to pay simply by asking the seller for the BEST price and terms. I have bought mountain acreage for $800 - not per acre, but total price. This was the number I was offered and the number I accepted and paid.

Using my father's philosophy, ask the seller for the BEST price and terms. See what is presented. It will also let you know how motivated the seller really is or if the seller is fishing for someone willing to pay top dollar for a property that may be more challenging to sell - and therefore, attracts fewer buyers.

It is my philosophy to not auction my real estate, nor do I bid on property being sold. I offer my best price. If it is not acceptable to the seller, I move on. I never counter offer. After all, that was my best price. It may surprise you have many times the seller would contact me in a day or two to accept my offer. Negotiation is knowing when to walk away and being strong enough to do just that.

• I highly recommend never being a party to any loan at any time that has a balloon payment.

Even if you are sitting on a mountain of cash with a new mountain being created every day.

• I highly recommend having a conversation with a lawyer prior to making an offer or counter offer, especially if seller financing is involved.

There are many laws and rules you must consider. Protect yourself and your future. Consult with an attorney and learn the options and considerations before you make a costly mistake. Should you decide to proceed with an offer, your attorney will be a great assurance all documents follow the laws and protect you, your future, and that of your heirs.

I have been involved in real estate finance since the 1960s. My thoughts are based upon history and just looking out for the best interest for all. You have no idea what tomorrow will offer. There are so many what ifs to consider that you could not list all of them. Please do not consider any financing with a balloon.