Are Mobile homes good 1st investment?
Evening all!!
My question is:
I have noticed a bunch of nice mobile homes in my area that can be purchased out-right for fewer than 7K plus the monthly maintence is $300-$400 (Lot rental)
I'd like to buy one or two and rent them out, the season is getting started down here and I could manage them pretty easily. Would this be a wise investment for my first transactions?
Also will park restrictions like 55+ parks hurt the overall value?
Does anyone know about how much it would cost to insure one of these mobile homes here in Florida, is hurricane insurance going to kill this deal??
Any and all comments are welcome…..
Also, not to sound like an advertisement I own the domain name WeSell4U.com
I’ve wanted to do something with it but I haven’t done anything….
Doe’s anyone think the name has much value?
Looking to maybe finding a web savvy partner to get it going…….
Any and all comments are really appreciated….
Sorry if that breaks any rules I’m a newbie on here and still figuring out how this all works….
Thanks!
For Sale or Partnership
steve , sounds like you are on to something good , john $$$ WOW you are a very helpful person . it seems mobile home investing is home investing under a microscope. i like this as im having a hard time seeing . jer
Ideadealer,
Glad to meet you.
If you do not want to lay out the cash to buy the mobiles try this way when you are first starting out, then start paying cash for the mobile homes.
I can honestly say with no 'tounge in cheek here', that doing a 1 mobile homes a week if not more depending on the size of your area and giving the seller no more than $10.00 for their equity and making $3K -$5K off the down payment and $50 -$100 a month on top of the real payment from your buyer is easy.
Here is the problem, most mobile parks require a credit application from anyone who wants to live in the park. Now, I will hopefully solve the problem.
I have done mobile homes, but before I purchased I would meet with the park managers. Some park managers think they are blessed with some kind of superior control over mobile home owners who rent space from them. 55+ parks do limit your buyers but maybe not in Florida.
So, anyway I would meet with the managers tell them how I planned on making sure the lot rent was made on time on any mobile home I purchased and how I needed a little help with the people buying from me if their credit was a little soft. I found the parks where the managers would work with me and then made sure I only purchased mobiles in those parks.
This is a niche area of investing that a person can become successful in with very little money, no credit and no a 'tad' of risk. I basically did this to round out my investing knowldge and to see how it could be done. Also, if it was $worth$ doing.
John $Cash$ Locke
WOW!!
Mr. Locke
That was so well put and gave me inspiration just reading it....
Thank you...Nice to meet you to Sir.
So...is what you’re saying that this is really doable by me!......and I can actually get great advice like that on this forum...
This is Great!!
My problem has been motivation, I have had a few businesses, made some mistakes, learned some lessons and I guess my mind is ready to start doing this for real and not just think about it....
But sometimes I'm wondering what I'm really getting into....
I had a few more questions if it's ok?
First of all any comments on longevity in this business...???
Like I have seen some stressed out land-lords in my time....Should I just put my Zen on and get to work or should I be prepared to go the distance....cause I might be a bit out of shape and need to start jogging again before I get going in this business...
But seriously, I understand what your saying but I'd like to break it down a bit more and really understand what you’re saying?
You said:
"giving the seller no more than $10.00 for their equity and making $3K -$5K off the down payment and $50 -$100 a month on top of the real payment from your buyer is easy".
So...I go to these parks looking for deals meet the managers get to know them, make sure they are willing to work with me....Work with me by
"I may need a little help with the people buying from me if their credit was a little soft..??? Can you explain what I'm doing here???
Should I be looking into this as renting these properties out..or just buying and selling?
giving the seller no more than $10.00 for their equity??? (could you explain please)?
making $3K -$5K off the down payment??
How?
$50 -$100 a month on top of the real payment from your buyer is easy". ???
Sorry this is a very long post maybe I'm asking you to much I thought about e-mailing you personally but not sure if that was ok...Plus I think future newbie's might be thinking about similar questions..?
So...any and all comments are truly appreciated!!!
I've been looking into finding a mentor but not sure where to begin...
Thanks for you patience....and help.
You two have an interesting topic going here. I'd personally be interested in viewing JL's response on this one. I've been interested in mobile homes myself being that they don't require a lot of credit or cash. My understanding is that the market in the South is good but when I look through the paper I don't see much demand for mobile homes.
As you are aware mobile homes depreciate rapidly. Pick up a NADA book on mobile homes, this book is like the Kelly Blue Book for vehicles showing current values of vehicles.
When you are buying show the mobile home owner the real value of his moblile, which I am sure is less than what he owes, thus you are helping him out by taking it off his hands, for $10.00, OK so maybe $100 if you are feeling generous.
On the other hand when selling your are selling to a Non Qualifing buyer, he is only interested in what the 'monthly payments' are the price of the mobile may never come up in the conversation, but if it does tell them the price. Monthly payments rule for the Non Qual buyer.
This is where the soft credit issue comes up, the park manager only wants the monthly rent, so guarantee that they will be paid by your buyer or you will pay them.
You can command the down payment because your buyer does not have the credit to purchase conventionally, so he has to pay for his lack of credit with a nice down payment, which goes to you.
Mobiles, some investors do not recommend buying them, but you figure out if this type of investing is right for you. Later on when you have a pile of dough from all your mobiles you may want to move up to SFH investing.
John $Cash$ Locke
Quote:
On 2002-10-19 12:14, JohnLocke wrote:
As you are aware mobile homes depreciate rapidly. Pick up a NADA book on mobile homes, this book is like the Kelly Blue Book for vehicles showing current values of vehicles.
When you are buying show the mobile home owner the real value of his moblile, which I am sure is less than what he owes, thus you are helping him out by taking it off his hands, for $10.00, OK so maybe $100 if you are feeling generous.
On the other hand when selling your are selling to a Non Qualifing buyer, he is only interested in what the 'monthly payments' are the price of the mobile may never come up in the conversation, but if it does tell them the price. Monthly payments rule for the Non Qual buyer.
This is where the soft credit issue comes up, the park manager only wants the monthly rent, so guarantee that they will be paid by your buyer or you will pay them.
You can command the down payment because your buyer does not have the credit to purchase conventionally, so he has to pay for his lack of credit with a nice down payment, which goes to you. <IMG SRC="images/forum/smilies/icon_rolleyes.gif">
Mobiles, some investors do not recommend buying them, but you figure out if this type of investing is right for you. Later on when you have a pile of dough from all your mobiles you may want to move up to SFH investing. <IMG SRC="images/forum/smilies/icon_wink.gif">
John $Cash$ Locke
Thank you John,
Sounds easy....(I think)
So first of all how do I present this to the current owner.
I have a man that is selling a mobile home in a 55+ park the monthly lot fee is $330.00 and he want's $3000.00 for a
12 x 60 mobile with a 12x16 florida room added on it. The 2br 1 1/2 baths is in very good shape(he's e-mailing me more details today)
He's willing to talk about it because he has e-mailed me a few times.
Not sure if this was correct to tell him but I mentioned that I may be able to take this home off his hands in a "Subject to" aggrement. (should I have mentioned that?) He said he might be interested if I could explain what I ment...
So how do I procced from here?
Thanks John, any help is appreciated.
I e-mailed you with some other information about my goals..
ideadealer,
Thank You for sharing your goals with me.
This mobile is most likely paid off, guessing here, so I am going to approach it that way.
You want to set up a note with this seller for the $3K. I would set the note up with the seller to be paid off in 3 years. The payments would be $91.27 per month at 6% interest.
Now take the lot rent at $330 per month plus the note payment at $91.27 per month which is $421.27 per month.
What do you think, depending on your area could you collect as a monthly payment to fall in line dollar wise with your area.
Can you get $527.33 per month from a buyer? I would ask for $1,750 down sell for $7,000 at 8% interest over 5 years then the monthly payment including lot rent would be $527.33 per month total to your buyer.
You would have a nice little profit on a deal like this. Then keep adding deals pretty soon, it is steak instead of beans.
John $Cash$ Locke
Hey John,
Thanks for the advice I just had another guy respond to an e-mail for another mobile home that has been on the market for months....asking $3500
Anyway one thing at a time...
So, when I get the gentalman to agree to leting me pay him off over three years at the amount we talked about...
What now...??
Do we still need a lawyer??
Is there a closing???
What forms need to be filled out...
Do I just print up a sellers aggrement or buyers note???
Then what about finding a no quailfied buyer!!
I don't have any lined up yet...
I know I need to market that with ads and flyers but that might take some time.
I'll still be paying lot rent and mortgage payments??? Might be a month or two,,maybe more
Should't I find my buyers first??
Should I begin generating leads??
Sorry, I am very new to all this I'm doing my homework but I can only digest so much....But I have always taken more time to learn something fully before I explode making it look easy...
So, its one step at a time for right now and I do appreciate your help!
David
ideadealer
This is just an idea. I myself am just a newbe. Years & Years of study and just now starting to practice.
Follow JL's format, ask your seller what process he had to go through to aquire title. I live in Oregon now, but in California moble homes are part of the dept. of motor vehicles. So your title can be researched there. Or call a dealer and ask them where you'd look to ensure that the seller is the owner and has no encumberances.
When your sure that your deal is clean, make your offer to the seller and set your
closing date down the road, 30 days or ??
You can even state a contingency saying "Upon finding a qualified tenant/buyer" and if you can't, the deal falls through. You can put up a little earnest money if you want, that will go to the seller if your deal falls and to your deal if it doesn't.
This way you can advertise the deal your offering ie.. Rent to own, lease option, low down, Owner will carry, what ever you decide.
OMG!!
Just found this site - Hi $Cash$!
Folks, the *BIBLE* for Mh investing can be found at many other competing sites, or on ebay - go find Deals on Wheels by Lonnie Scruggs.
Everything you need to get started, $30.
It rocks - I was a dip-your-toe investor wannabe for many years, but now I am a successful Lonnie investor - 12 buys, 10 sales since March - I average about $2500 per purchase, and about $10K per sale - some for cash, most on a note.
Best deals:
first one, out-of-state owner, got it for free - ~$2K in back rent, taxes, and cleanup - sold for $8300, and I got a big screen tv out of the deal - the home was abandoned and the tv was inside!
Recently paid $2500 for a 1984 3/2, sold with no holding costs for 16.5K on a note. Yes, sixteen and a half thousand.
Not full time yet, but hopefully within a year!
Hoping to add Sub 2's to the repertoire as well - analysis paralysis, but Lonnie got me over that one, so $Cash$, get me over this one![ Edited by Steve-WA on Date 10/29/2002 ]