Investing in mobile homes

[yveskleinsky]

Anyone here have any experience in investing in mobile homes/mobile home parks? How about getting mobile homes reclassified as SFH?

 

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[Runum]

I think DHappy is your man. Might send him a PM.

 

[yveskleinsky]

Thanks!

 

[Bilgefisher]

I would jump over to JScott's blog. 1-2-3 Flip He has recently bought 2 and financed them to owners. (The link is for his attention. He might have some good tips to give ya.)

 

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[hatterasguy]

Wow that looks cool! I wish we had trailer parks like that around here. I'd take $10k and go play with it over the winter and see how much I could make if we did.

 

[hatterasguy]

Seems like a fantastic way for someone without any money to get into the business.

 

[dollarBlogger]

I'll write more when I get a few minutes, but here's basically what I'm doing (Lonnie Deals):

Lonnie Deals

And here are my first two deals:

MH #1: Too Easy?

MH #2: Negotiating Fun

MH #2: Sold

It definitely takes time and effort to find great deals and get them sold. If you have the energy to do this, it's a great way to start generating some great cashflow; but you will find that it's a good bit of work until you have reliable sources of deals and buyers...

Thanks for sharing your Lonnie deals and for the links back to your website! Very good step-by-step there! Quick question.... Maybe I missed it, but how did you market for those Lonnie deals?

I appreciate it! Speed++

 

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[Sid23]

I think he found the first buyer on Craigslist...not sure on #2.

 

[Luke12321]

I read the 2nd book by Lonnie. Before I had finished the book, I had located a home that looked like a deal. It is very old (75 model) and needs some work such as a soft spot fixed. Everything else is said to be good to go but with no power hooked up...who really knows.

Called the MHP office and they acted as if they had never heard of anyone doing a Lonnie Deal (Did not refer to that but explained what I was wanting to do).

We will see how it works out, should get a call back at the latest tomm. Lot rent is due today for the seller but I can't make any moves until I get the go ahead from the MPH owner.

Owner wants $800...or best offer. If everything is a go, I will probably offer him $500 cash and get him out of his problem and moved into his new house.

It is a 2 bed/ 2 bath...no heat.

I will keep you guys updated...

 

[Runum]

I read the 2nd book by Lonnie. Before I had finished the book, I had located a home that looked like a deal. It is very old (75 model) and needs some work such as a soft spot fixed. Everything else is said to be good to go but with no power hooked up...who really knows.

Called the MHP office and they acted as if they had never heard of anyone doing a Lonnie Deal (Did not refer to that but explained what I was wanting to do).

We will see how it works out, should get a call back at the latest tomm. Lot rent is due today for the seller but I can't make any moves until I get the go ahead from the MPH owner.

Owner wants $800...or best offer. If everything is a go, I will probably offer him $500 cash and get him out of his problem and moved into his new house.

It is a 2 bed/ 2 bath...no heat.

I will keep you guys updated...

Go Luke Go! May the force be with you.:fastlane:

 

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[MobileHomeMavs]

I know you already started, but if you think you are going to keep doing mobile home deals, then it is a good thing to have a pre-list of buyers. You can do this in a couple of ways. I like to post an ad in my local penny saver type free paper that says something like "2bd, 2bth Mobile for sale plus appliances No banks I finance $250 month w/ Approved Credit Call XXXXX" When I get callers I tell them the place was sold, but I have others coming. Take down their info and you have a list to call when you have your next deal.

 

[yveskleinsky]

How do you handle rent collection and evictions? ...I think these two things keep most people from investing in mobile homes--I'd be curious on how you handle them.

 

[Luke12321]

Update on my deal...

The mobile home park owner said he would not allow someone to owner finance a deal even though I explained to him that I would be doing improvements to the lot and home to make the sell. I wonder if he would turn someone down who was getting a loan for a home from BOA? Doubtful! I guess he gets his money regardless...so he could careless.

Anyway,

As far as rent collection, just have a strong contract written up and when the time comes, if they have not moved out....you have to go to the court house and file papers. Charge late fee's....be strong with that because they will run you over if you let them slide. You may want to look into doing Lonnie Deals though, because it requires no rent and you are not required to maintain the house while someone else is tearing it apart. If they don't pay, you still get house back just as you would if you were renting.

I would have a PO Box to collect the payments if you don't want to deal face to face with the people. That way they don't have your home addy and it would decrease the chances of a bad situation.

 

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[MobileHomeMavs]

How do you handle rent collection and evictions? ...I think these two things keep most people from investing in mobile homes--I'd be curious on how you handle them.

If that is what is keeping people from investing in mobile homes, they are not understanding the psychology. First off I do not rent anything. I sell all mobiles on terms. That to me is the key. When combined with the park lot rent and my note payment, it usually is below the average rental. However, my buyers are now owning the home and thus make improvements and take great care of the place (not always but most often). Why? Because they have a great deal, pride of ownership, and when they pay it off they can live dirt cheap. Also they can sell the mobile and move up to a stick built home.
Oh, I happen to open accounts at local grocery stores with banks inside. They are convenient for my buyers as they shop there all the time and can pay me easily. I never want to make it hard to pay me money!

 

[andviv]

If that is what is keeping people from investing in mobile homes, they are not understanding the psychology. First off I do not rent anything. I sell all mobiles on terms. That to me is the key. When combined with the park lot rent and my note payment, it usually is below the average rental. However, my buyers are now owning the home and thus make improvements and take great care of the place (not always but most often). Why? Because they have a great deal, pride of ownership, and when they pay it off they can live dirt cheap. Also they can sell the mobile and move up to a stick built home.
Oh, I happen to open accounts at local grocery stores with banks inside. They are convenient for my buyers as they shop there all the time and can pay me easily. I never want to make it hard to pay me money!

yeah, cool and everything... BUT....

the question is, how do you handle it when the new owner stops making payments on your agreed terms? Could you please explain a step by step of how it is handled when your note goes into default because the new owner is not paying you anymore?

I haven't seen that question answered here yet...

 

[Sparlin]

yeah, cool and everything... BUT....

the question is, how do you handle it when the new owner stops making payments on your agreed terms? Could you please explain a step by step of how it is handled when your note goes into default because the new owner is not paying you anymore?

I haven't seen that question answered here yet...

I'm not an authority at all in this area, but one of the seminars I listened to referenced having the buyer pre-sign an eviction agreement (non judicial) in order for the sale to proceed. From what I remember, the agreement basically said the borrower forfeits all rights to the unit if they are 60 days delinquent. They also had a court document pre-signed authorizing eviction (note: they sign a form, but do not file it). That way, if they person fails to vacate, the lender can present it to the court and have the sheriff serve them. I would have to look up that seminar to get more clarification.

 

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[yveskleinsky]

I was just reading JScott's blog, and there is a great question in there that asks what happens when a person stops paying lot rent. Does this lot rent (which can really add up) become the burden of the owner of the MH?

 

[Sid23]

I'll write more when I get a few minutes, but here's basically what I'm doing (Lonnie Deals):

Lonnie Deals

And here are my first two deals:

MH #1: Too Easy?

MH #2: Negotiating Fun

MH #2: Sold

It definitely takes time and effort to find great deals and get them sold. If you have the energy to do this, it's a great way to start generating some great cashflow; but you will find that it's a good bit of work until you have reliable sources of deals and buyers...

1) Read JScott's blog and all the comments below each blog post. People have asked these questions and he explains the answers to all.

2) I'm still trying to figure out the laws behind financing the homes. In Minnesota, to do Lonnie deals, it appears I did a license that is $500 and needs to be renewed often. Anyone know anything about this?

 

[yveskleinsky]

I did read the articles he had posted, but didn't see where he addressed that specific question. (But that could be user error on my part!)

As far as a license goes, maybe they are talking about a "dealership" license, which is kinda like a real estate license for selling these things. As far as I know it's not mandatory...I'd be curious if it applies to resale.

 

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[Luke12321]

From what I understand, it is pretty much like having a dealer license for selling cars. You can buy and sell probably like two or three without having to worry about it but as your volume picks up, you need to get a license.

I have heard if you have a dealers license then you don't have to go through the trouble of sending off a title to get it in your name. Not sure about that but something I will have to research into. I am just learning about mobile home investing myself.

 

[Runum]

In Texas you can sell one a year without a license. The process costs about $900 the first year and about $300 to renew every year afterwards.

 

[yveskleinsky]

So Runum just answered my question about lot rent--basically lot rent is included in the monthly payment to the investor, so if they don't pay you--ya know right away--so lot rent should never pile up without you knowing.

This is so interesting.

 

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[mtnman]

Just do it like this.

[ame=http://www.youtube.com/watch?v=q-RLqLx1iYI]YouTube - Painfully Honest and Epic Mobile Home Commercial[/ame]

 

[Runum]

Yep, there it is. Good find Matt.

 

[Sid23]

J,

When you acquire the home in the beginning, do you have to go through the same application process, etc as your final buyer?

Does it raise any eyebrows or questions from the park mgmt when they have you signing all the park paperwork day 1 and then a week later a new person is signing for the same MH?

 

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[faq88]

How do you set up your LLC's for this? Do you use one to buy the property and the same entity to act as a bank or two separate? Do you have any drafts of the contract that you use for your buyers?

Thanks,
Mike

 

[rcardin]

How do you set up your LLC's for this? Do you use one to buy the property and the same entity to act as a bank or two separate? Do you have any drafts of the contract that you use for your buyers?

Thanks,
Mike

When you start with mobiles you need to buy in cash. Why complicate a 2500.00 to 3.000 deal with an LLC.
Make friends with the lot owner and guarantee the rent on the lot. Owner finance for 3 years at 300.00 per month. If you can make your money back,without too many vacancies. in that time great! Property is paid for the first year. Sell it until it just falls apart.

 

[faq88]

Thats kind of what I figure. I would prefer the protection of an LLC. Especially when working with owners that could be a little unhappy about the deal. Let me make sure I'm understanding this correct though. You have a LLC that buys the property (cash in hand), then the new owner makes payments to that same LLC? Do you have copies of your contracts? I would be interested in seeing them.

Thanks

 

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[kwerner]

Do you have copies of your contracts? I would be interested in seeing them.

Thanks

If you're looking to do "Lonnie Deals", you should pick up Lonnie's books, Deals on Wheels and Making Money with Mobile Homes - he has the contracts / forms / notes he uses in the appendix.

Plus, you'll learn a lot about the subject from the books.