All Forum Posts by: Steven J.

As I'm starting out with my mobile home investing venture right now I've run into what seems like a standard problem.

Well, first of all I'm finding out managers of parks don't necessarily understand investing. I've asked about comps a few times and I'm usually met with a confused look and a manager who doesn't know what homes are selling for.

My biggest problem is with the 55+ parks in the area. I'm just about to turn 25 so I'm a strange visitor in these parks and I'm immediately written off as some young chap looking to buy for his grandfather or just completely confused.

Are there suggestions out there as to how I can come across as a serious buyer?

Paul Timmins,

Thank you for the detailed checklist of things to go through before buying an income property! That is a very helpful list of what I need and where to find out.

And thank you everyone else for the information. Lots of ideas and important things to check out before getting a property. It's all very helpful.

To give you all an update on the property, I had my realtor get me some information on it and right now it is pending.

BPO is a broker's price opinion. Correct me if I'm wrong, but its basically the appraisal from the bank. What I'm unsure of Mary B. is how much weight do you give the BPO? Its a starting point for where you can start with how much the property is worth. Does the BPO of a multi-family have more details including the income and expenses?

Also, thanks for the quick responses, all. Rick L., how do I convince the seller to allow me to view the tax records?

Alvin Grier

I'm looking into multi-family properties. Possibly to wholesale them. How do you go about getting accurate information on the property regarding the cash flow statements? I anticipate using a script similar to "Now, Mr. Seller, I'm looking to buy the property and before we waste any time of yours or mine it will be better to provide documentation of your income, rent rolls, and expenses, because if I don't know now, I'll eventually find that information."

Am I accurate in that that is a possible thing to say? And how do fine that information?

Thanks,

I've located a multiplex in my area but I'm not sure where to locate the information needed when investing in multi-family units. For example, is the selling agent going to have the information necessary to figure out what my income is and expenses are? Or do I need to go to the owner? I know I'll need access to the rent rolls, call up utilities to get estimates (I believe they won't tell me without owner consent), tax information, repairs needed.

And what recommendations do you experts have for verifying what the seller is claiming the income and expenses are? I plan to trust, but also verify what I need to know.

Thanks for the answers, guys. Most of what you mentioned does seem like common sense logic, mostly what I've come up with on my own. I'm glad to know it sounds like I'm on the same page as you guys.

I was recently at an investor meetup and folks were trying to divert me away from mobile homes. Some of the reasoning was that just like a big mansion, mobile homes are usually very custom built once you're past the initial framing, walls and floors. This does make sense and I understand, but I'm moving toward mobile home because I believe I will be able to do much of the work myself and more cheaply because I'm not working with a large house. And my assumption is that mobile homes are roughly the same layout for the initial construction such as framing style, flooring, plumbing and electrical. Correct me if I'm wrong. Another issue that came up was the marketability of manufactured homes. One guy has has 90 some viewings and 3 offers all of which fell through after the inspection period. His critiquing was nearly always the same where people said "Oh I love the home, its beautiful and great and has everything, but its a manufactured home." Its on sticks driven into the ground and you buy the home and the land. Does anyone have any insight into why this may not be selling and what could possibly be done?

I'm looking to invest in mobile homes, just starting out, and I'm getting a feel for what my area has to offer. While driving around I notice certain parks don't appear to encourage additions to the homes where as other parks look like 10 'handy' men worked on the same dilapidated unfinished porch.

I'm curious as to what others' takes are on additions to mobile homes. Should I stay clear from them? Is permitting different on mobiles since they can count as personal property? I'd love to hear thoughts.

Thanks,

Bryan H.,

I know this is a late post and probably beyond the time frame you're looking for a response for, but I digress.

I'm a new investor looking to get into mobile homes and mhps so I'm reading up on it. I believe that if running the numbers on the park the $34,200 divided by the asking price of $220,000 equals a 15.5% cap rate - I believe I understand that correctly but don't hold me to it. That sounds pretty good but I'm not sure what mhps should demand.

As for the vacant insurance lot that sounds like a decent idea although if you really want to avoid insurance get rid of the septic tanks and hook everyone up to the sewer system, then there shouldn't be an issue with that. Maybe this guys knows his septics are not in great shape and is just waiting for one to go which in that case could cost you... not sure.

I believe that mobile homes parks are considered commercial property at a certain size so I'm guess you'll get regular commercial rates.

There is also the chance to do owner finance on the property. Not knowing what the investor needs exactly its hard to say how you could work out that deal.

I've been running around to various parks lately and I'm curious as to how others view certain parks. There are really nice 55+ parks with large double wides in great shape, then there are really dumpy parks with single wides some of which I can't imagine people living there and much of the 'additions' can't be to code in any manner appear the work of whatever handyman was related to the owners. If you've got some insight on what to invest in and what to stay away from I'd appreciate that.

Ned Carey, can you explain how we locate what the local cap rates are? Do we ask realtors getting a few opinions from them and guestimate? Or is there actually an 'official' number we ought to be using that is found on an assessors site or similar? I'm just not sure which sources to trust when it comes to cap rates.

I would be careful about how you would word such a letter. Put yourself in the sellers shoes and think how it would be getting a letter from some investor saying you're the only way out. I personally would be put off by it and purposely avoid such an investor. It may also sound like you're desperate to buy this property at which point negotiations might be a little tougher. I would suggest send a letter of intent with an explanation of the price you're offering.

It does indeed sound like it could be a great deal if you get it for the right price. My guess would be this seller is perhaps not that motivated. 200 days on market at 70% ARV with 40k+ in repairs does not sound like this seller is to motivated. Perhaps, you can send postcards monthly and just remind him you're an option if he's willing to come down on price.

I have somewhat of the same problem. There are three of the ugliest run down houses near me all owned by the same investor. All boarded up and looks like they could burn down at any moment. I've send multiple postcards specifying those properties. I even tried to drive to the owners mailing address but they live in a gated community so no getting in there. For now, I'm going to let those slide because I've heard nothing so they must not be very motivated. My guess is they are holding onto the properties for the land value because its near a major road.

Good luck.