All Forum Posts by: John Arendsen

I guess I'm on a different playing field than a lot of F&F's. We pay cash for all our properties, and as contractors do all of our own work which is very high quality. We don't finance anything and presently we're not selling anything. We're just building a passive income portfolio. Hope that helps @Dan H.

Personally I keep it all local and plan to keep it that way as I PM my entire portfolio. But then that's just me.

I'll digress back to my favorite and persistent question. Is the MHC in the PATH of PROGRESS? Or is it in a run down and blighted part of town moving away from that PATH? There are MHC's all over the USA that should be closed down and rezoned for higher and better use that I wouldn't own if they were given to me.

Another thing that hit a nerve is the thought of having anyone manage my CASH. I don't care if your born again faithful brother or sister is managing your doe rey me. When it comes to CASH it has a tendency to get legs. If you're not going to be the one personally handling your money expect to be ripped off. 

As far as  TOILETs is concerned that was probably me. I say that because I'm not seeing many other Mobile/Manufactured Home Contractors on this platform except for me and that's how most contractors refer to them when they're really run down.

Another thing that rubs me the wrong way is the dirt road. Where is this MHC located? Does it flood? Is it in a flood plain? What condition is the well in? The septic? IMO you could be buying a lot of headaches even if you were your own PM which it doesn't sound like you will be. 

Lastly unless its easy for you to jump in your car on a moments notice and get to the MHC in less than an hour or so I'd avoid it like the plague. I've seen too many absentee owner scenarios in my 40 years in this biz. Unless your an investor in a large syndication or a REIT that owns several MHC's and can dollar cost average the bad ones from the good ones I'd proceed with caution.

The photos below are a project I'm currently working on in Leucadia, Calif, a funky little North San Diego beach community. But on the upside it's surrounded by multi million dollar mansions and estates and there's really an issue with affordable housing which is a very relative and open ended term in this case.

This home is a 'TOILET" and will have to be rebuilt from the frame up for a cost of about 75k (contractor cost). But I knew that going in. I paid 100k for the privilege of leasing the space for 1k/mth adjusted upward and escalated according to the CPI annually.

It will be stripped to the frame and rebuilt from the bottom to the top inside and out with a new 12/12 pitched metal roof. It will go from looking like an old 'WOBBLY BOX' trailer to a quaint beach cottage and will mix in well with the 92024 zip code which BTW is one of the highest valued per capita zips in San Diego County.

Sure it will cost me 175k plus 1k/mth to purchase, rebuild and sub lease this home but the good news is I can get about 2500/mth on it while it continues to appreciate due to is very desirable location of less than 300 feet from Beacons Beach; one of the best surf breaks on the planet.

Like I said everything is relative. When all is said and done I'll be making about 18-20k/yr and when and if the time comes to sell it I'll be able to get at least 200-250k for it at todays values. If beach property in San Diego continues to go up like it has for the past 100+ years it will be much more than that.

Just saying...................................

Reach out to @Ken Rishel on the BP platform. He'll be able to steer you in the right direction.

One of many @Kyle Mccaw

There Is Still Money To Be Made In 'Mobile Homes' In Today's inventory strapped San Diego Coastal real estate market

I am frequently asked if the market is still ripe for investing in old "Mobile Homes". The following post may give you some ideas and suggestions about the viability of investing in older homes.

Cheap does not always translate to a good deal. It's all about the 'PATH of PROGRESS' & that means, yes we say it again, the LOCATION, LOCATION, LOCATION! Those looking for new or different ways to provide housing for your clientele, a vacation home for you and yours or perhaps even enhance your own passive income portfolio may find this article interesting.

We Purchased this 1977 12x36 (432sf)  single wide Mobile Home for 100k. Given its 300 foot proximity to, "BEACONS BEACH",  one of the Worlds most popular surf areas located in the city of Leucadia, Cali on the North San Diego Coast. Add to that it's nestled in an upscale neighborhood of multi-million dollar homes and properties. In fact the 92024 zip code boasts of some of the most expensive properties in all of San Diego County.

We are installing a 1x1 foot footing with an 18 inch rebar reinforced and concrete cell filled block and mortar stem wall  around the entire perimeter of the footprint in order to support the new interior drywall, exterior Hardy Board Cemetitous siding and a 12/12 pitched metal roof.

I'd say that's a pretty safe bet considering we're going to have to spend close to 75k (our cost as contractors) to strip it down to the bones and rebuild it from the mainframe up to and including the roof. In other words it will be a brand new home on a 1977 chassis which means for all intent in purpose it will transformed into a brand new 1976 Mobile Home.

This will be a total strip down including the cabinets which have already been removed, acoustic ceiling, flooring, wall paneling windows, doors, interior walls, floors, appliances, (water heater will be replaced with a much smaller tankless water heater which will give us an additional 32 cubic feet (4sfx8') of living space.

Above the furnace will be replaced with a sub floor heating system which will allow us an additional 32 cubic feet. An additional 64 cubic feet of interior space in a 432sf home doesn't sound like much but you will see when the project is finished just how valuable that space was and how much more open it enhanced the overall ambience .

This home will be literally stripped to the bones and rebuilt from the frame up. It will be a 432sf open studio with a fully functional custom kitchen with all  modern below counter small scale appliances and fixtures in the kitchen and bath. It will be reduced from a very cramped and cluttered 1 bedroom, 1 bath, kitchen and living area to a much more open and spacious one room studio with a full and enclosed bathroom.

Why not just remove it and replace it with a new one you may ask? Simply put it's about the existing setbacks and the fact that this MH is what they call "legal non conforming". So once from it's removed from its original situs the empty space would then have to become code compliant. 

This means that instead of a 12x36 (432sf) Mobile or HUD Manufactured Home you would have to install a 10x34 (340sf) Park Model RV thereby giving up almost 100sf or 25% which makes it a much tighter fit. 

{For some reason I can't upload the photo of the Park Model. Let me know if anyone would like me to upload one in a forthcoming post) 

There are issues with Park Models vs Mobile and/or Manufactured Homes. There are times when you have no choice but to install a Park Model if setbacks cannot conform to new installation standards. But there's much to be said about purchasing an existing home and doing the above.

When finished we will have close to 200k in the investment with a 25 year lease of 1000/mth. escalated according to the CPI. Our lease allows us to sublease for one year minimums which we plan to do for about $2500/mth + utilities including escalation clause.

In this cozy little neighborhood of upwardly mobile millennials looking for a fun place to live, work and play and the well healed Baby Boomers seeking a cute place to hang out, take long walks on the beach, bike the many miles of beautiful coastline, golf, fish or surf to your hearts content.  This may be your chance to downsize permanently with only rent and no responsibilities or to use as a vacation home and live in and around the predominance of multi million dollar MANSIONS.

HA! Funny you should bring up THE FARM @Jo-Ann Lapin. We've been doing foundation system retrofitting, engineered certifications and 433A's in THE FARM as well as all of California be it park communities or on private lots/parcels for the past several decades. We're just about the only company most lenders i.e. Wells Fargo, title companies, real estate brokers, manufactured home dealers and law firms, etc will use. Let me know if any of that ever crosses your radar.

I'll copy and paste the to you in a PM. I'd also like to make both you and @Brandon Booth colleagues and stay in touch since we're all in and around the San Diego & South Riverside areas. Our office is in Vista and our construction yard is in San Marcos so we're pretty centralized to serve this area well. But we do work Statewide as well.

@Brandon Booth. Start with MHC's that are in the "PATH of PROGRESS". Avoid MHC's that are blighted, in bad areas or have high vacancy factors. That's happening for a reason. The rent/lease is too hight and there's no rent control to reign it in. 

Be mindful of an age old adage "The higher the rent the lower the value of the MH" Additionally, and in most cases, you will find many if not most MH's to be in some state of disrepair. While you can usually buy them on the cheap that's not to say that you'll ever get your money back and you're on the hook for the rent, utilities, etc. while you're trying to sell it.

Look for MHC's that are gentrifying and in an upwardly mobile (pun intended) geographic and socio economic locations. There's a lot of old and beat up "TRAILER PARKS" "MOBILE HOME PARKS" & even "RV PARKS" where there's just little or no hope for the future. In fact we in the industry refer to them as "TOILETS". They should actually be condemned and the land converted to higher and better use.

I would focus in parks that are situated in desirable geographical locations i.e. beach cities, golf courses, mountain, desert, lake, river resort locations, etc. Also unless you really have a gem in an upscale geographic location avoid investing in PRE HUD MH's (built before June 15, 1976). They are very difficult if not impossible to find conventional financing.

Lastly, I'd recommend starting out with resident owned communities where you actually own the dirt. It will cost a lot more but at least you'll have a true RE investment and not be at the mercy of a landlord.

@Janene Tompkins, Doing a bottom to top in and out (BTIO) on a single wide like the one here is about 100k California cost. A doublewide would be about 175k+-

Hi Brandon, I see you're from San Diego. I own 5 MH's in Leucadia. What specifically are your intentions? If you're thinking about using them as rentals you first need to check with the MHC owner/manager. 

Most rent/lease parks do not allow subleasing. We just happen to be in a community where we have a 35 year lease with a sublease clause in it so we can rent/lease it out for a minimum of one year or more. The only way you could sublease in most instances is in resident owned park/communities. But even some of those HOA's have some pretty strict subleasing CC&R's

Here's another thing we do:

These two photos are before shots that we're currently working on. You won't even know it's a MH when we're done. We'll be stripping it down to the bones and rebuilding from the frame up. It will look like a California Craftsman when its finished.

The photo below is a hybrid. Bottom floor is a 14'6"x36' (504sf) 1+1. The top floor is a 630sf site built 2+1 for a total of 1130sf on a 30x40 (1200sf lot). There's still room for two Mini Coopers to park tandem in the driveway and a golf cart on the other side of the home. Here's a link to a post I wrote about the project you might find interesting.