Newbie Jumping In and Seeking Advice about Comps
Hi All,
I'm meeting the seller tomorrow and I wanted to ask a question about Comparable Sale Prices in my area, San Jose CA.
Some info I gathered over the phone:
The mobile home was built in 1972.
has 3 bedrooms and 1 1/2 baths.
located in an all family park.
is vacant as owner's mom has moved.
has some floor damage and original carpeting.
owner is asking 17,000.
(I've seen similar homes listed for 35K-40K)
Now, let me tell you that I did not ask any questions to determine if the seller was motivated (so please excuse my newbie-ness) but I wanted to use this opportunity to gain experience in talking face-to-face with the seller.
However, ithe seller was willing to settle for a lower price, then my question would be 'how low should he go"? Obviously, I won't know what price to accept if I do not know at which price I can sell.
I've looked around for info on comparable sale prices for used mobile homes but no such luck. For a begining investor, how would I know at what price this home would sell for if I had never sold one?
In any case, this is a good learning experience and I'm looking forward to trying out some of the negotiating scripts that I have gathered so far.
If anyone could assist me in determining a realistic resale price in my area, then that would be greatly appreciated.
Thanks all for reading! 
Hau
Hau,
Glad to meet you.
I like the part about you getting face to face with the seller, good job there.
Unless the mobile home is converted to real property, you are not going to find any 'comps'. Real property means is sits on its own piece of land and taxes are paid as real property versus a mobile home in a park which is taxed as personal property.
There is a book called NADA which gives you the price of what a mobile home is worth. If you pay over $1,000 for a 72 mobile home you have paid to much and a thousand dollars would be a gift to the owner.
Now if it is tough to find a mobile home park in San Jose that has any vacancies this may be a different story, but it would have to be a great big deal to pay that much.
Welcome on board this board, if I missed something on this deal let me know.
John $Cash$ Locke
Hau,
Like John said unless the land is part of the property with the MH then you will have to check it the NADA for a value. I have done a few MH deals and they can be very profitable and a great source of cashflow.
Try to stay away from Single-wides that are 10' wide, as they are more difficult to resell.
As I tell a lot of newbie investors, GET EDUCATED, Lonnie Scruggs has a great and simple to read (and funny) book on buying and selling MH's.
If the lot is not included in the price, find out what the lot rent is and if it is up to date. Find out what the requirements are for a new owner to qualify for approval in the park (credit is the most common). Also check with the DMV as to whether or not you must be licensed and/or bonded (you must be both in Florida) to deal in MHs.
Don't let a little due diligence scare you, it's what makes investing more profitable. "Remember Investing is not Risky, it's the Investor" (Rich Dad Poor Dad, Robert Kiyosaki)
Good Luck
Juan
Is there a specific NADA book for MHs? I glanced thru one at the local Borders and only saw cars.
One must be licensed/bonded for Florida? Hmmm, was not aware of that one. I'm in North Florida and have scoped out several MHs. Time to do more homework.
Ho...
Thanks JohnLocke and JuanRestrepo for the generous advice.
John, I went to nadaguides.com and found that a 1976 low end mobile is valued at $5,787. I could not find anything earlier than 1976, so I am looking to offer less for this 1972 model. The base lot rent for this park is $700 plus utilities, so I am also factoring the holding costs in the price.
Juan, I have read both of Lonnie's books and I suppose this the 'GET EDUCATED' phase. I'm looking forward to meeting more sellers to gain more experience in determining a realistic selling price and understanding the steps in doing these deals. I'll also follow up on the DMV dealer status check.
You know, I hear that you can find much cheaper homes for about 100 miles east of where I live. The new mobiles there are listed at 40K, whereas the same homes maybe listed for 100+ K here. That sounds like a great area for used mobile homes, so I think an extra drive during the weekends may be better for this newbie. What do you think?
One question that I have for both John and Juan is that 'Do you do these deals with your own money?' I am starting out with my savings since I do not yet have the track-record to comfort my friends and family to invest with me.
Also, if you were starting out and had the knowledge that you knew now, could you do these deals without using your own money?
Thanks again for your advice and time. It's greatly appreciated. <IMG SRC="images/forum/smilies/icon_smile.gif">
Hau
[ Edited by haungo on Date 01/08/2003 ][ Edited by haungo on Date 01/08/2003 ]
sorry for a slight change of subjuct but this is inresponse to a reply you posted. John do you have to be liscenced and bonded in florida just to buy and resell mobile homes or do you also have to meet these requirements to rent them out?
[addsig]
myself31,
Glad to meet you.
I would have to check your State Statutes to answer your question.
I would think if you are buying and selling as a private investor that you would not be required to be licensed.
To be on the safe side however, I will ask John (LV) (jfmlv1950) to check this out, he is our Research Guru at Cash Now.
John $Cash$ Locke
Hi myself31,
I have looked at the Florida Revised Statutes and have not found anything requiring a private investor to have a license to buy and sell mobile homes for himself.
I believe in the post above, JuanRestrepo as referring to buying and selling as a licensed MH Dealer, not as an investor, which does require bonding and licensing.
Best of luck,
John (LV)
dfd
Best way to do this is to run a test ad in the paper or look at classified ads in the newspaper to look for other mobile homes selling in parks. Disregard the year, and look primarily for size. If your mobile home is in good shape, you should be able to sell it for fair price. I have just started this too, and it looks promising. I might do lease/option as the tax ramifications are terrible.
pete
I think what you may be referring to is if the mobile home is not part of the land then it is considered a tagged vehicle which in Florida you can only sell so many tagged vehicles per year..something like 5 I think...unless you have a dealers license..but of course this doesn't matter if the MH is homesteaded on the land
easy way to tell..if the tongue and axels have been removed..it's good
Chris
I would be careful with any pre-1976 MH if you intend on financing other than private investor. Not many lenders will touch pre-1976 MH. ..Of course they need to be with land to be considered real estate. ...I'm only familiar with Florida however. ...If I had a lender that would do a high LTV pre-1976 MH loans, I could do quite a few deals.
Blueclassring,
I was just curious about your comment on tax ramifications. Had a chance on a 1986 14X56 for $5000 but passed on it. I didn't think of l/o. I didn't have the cash and he wanted all cash to buy another trailer.
Any comments solutions anyone.
Thank you all in advance.
Scott