Hey guys, been a little while since I have been active on this forum. This a great site. Have learned alot from many members on this forum.
Just finished closing on my third mobile home park purchase and am loving it. Have 6 more in the pipeline coming up.
This journey started five years ago when I was a real estate broker working two other jobs just to make the bills. Showing commercial properties by day, bouncer at a local bars at night. That crap got old.....quick!
Granted, in 2012, being a new commercial RE broker in one of the worst real estate markets since the 1980's RE recession, was extremely tough. But, still managed to just get by with a house flip here and there on the side along with bouncing. Then decided to put up or shut up with the advise I was preaching to clients. I didn't want to be another statistic of the saying " those who can't, teach". Enough was a enough and it was time to get a seat at the big boys table. But there was one big problem, I had no real sum of money to invest....What to do?
It was at this exact time I came across a book called, " Deals on Wheels" by the late Lonnie Scruggs. This book ironically was among a large stack of books on my fathers bookshelf. Originally printed in, I believe 1992, it was small, large print, and had pictures. Figured I would give it a shot. While reading, I noticed the prices and costs for investment in the transaction of these homes. But, I knew the book was outdated and the prices must be considerably higher and out of reach for my modest budget since 20 years have passed since its publishing. However, I could not stop thinking about it and figured I would check out a mobile home park I pass by on the highway on the way to the office everyday. To my amazement, the mobile homes were still at reasonable prices. It was time to do a little digging and see what I could get. Looked around the park and spoke to the park manager. Found a home, 3 bed 2 bath with price of $6,000 but needed a little fix up. Now the teachings of the book became real....This could actually work.
Why take the risk myself? I had a coworker who was also younger and wanting to get some sort of cash flow in a commission based industry. Talked him into going in on the home 50-50. This achieved two things, allowed me to only put up $3,000 of my money and learn a valuable lesson in partnerships (that is another story). Besides, worst case scenario I lose $3,000 which I could get back in a few months if I picked up an extra shift or two at the bar. No bank would lend to me so I had nothing to lose.
Bought the home, got the title, and became a mobile home investor (with a partner). Now I had a home that needed a little fixing up and no money to fix it up. After thinking about it in the car before I left the sellers home, I went back in to speak with he and his family. It was March, the seller stated he would not be moving until at least June because he did not want to move with only four months left in the school year with two children. I asked where would he go until the school year ended? He stated he would go to a local hotel or something. "Well why not just stay here, save yourself the move, and rent this home until you want to leave?" I asked. After a short negotiation, he agreed to stay at the home for a rent of $400 a month on a six month lease. I did the adding and it came to a total rent of $2,400. To my amazement he gave me back $2,400 of the $6,000 I just gave him. Wow..what a deal I thought. I am now have only $3,600 invested into the mobile home with six months to get some rehabbing money for when he moves out.
Five months later the family moved and gave me possession of home. They did not get an money back for the last month as they were breaking the lease and agreed to the terms. I managed to save up $2,000, that my partner matched for a total of $4,000 to fix up the home. Installed new hvac, heat pump, paint, new carpet, and two scratch and dent appliances within two weeks. We are not invested into the home a total of $7,800. Put the home on market with a sign in the window and an add on craigslist. We had a buyer for $18,000 in four days. Buyer put $6,000 and agreed to a $450 payment for 4 years with 9% interest. My partner and I split the down payment 50-50.
I had seen the light. Two days later the park manager called me to come to his office. The park manager, very pleased with work I had done, approached me with an offer for two homes they had just received possession of. I bought one home for $1,000 (3bed 1bth) and a second for $1,400 (large 2bed 1bth). My partner had not interest in flipping other homes, so I purchased these with the $3,000 down payment I received just two days before. Long story short, a month later, I sold both on a rent to own (now a rent credit program) with total down payments of $7,000 and total monthly payments of $925. With the previous home sold with my partner, I was getting a total rental payment of $1,150 a month. This opened my eyes and allowed me to purchase and flip an additional 4 homes that summer for a total of seven flips in eight months with a monthly rental income of $2,400 a month.
With this monthly income and a small commission made on a sale of dentist office, I had $25,000 available to invest by the end of September. After this new found niche and wealth of first hand experience in mobile home flipping (mostly of what not to do), I did the math. The park I had purchased homes in was one of the biggest in the state. It had over 500 rented lots. With a $450 monthly lot rent and that many lots, the park had the potential to make $225,000 a month!! Get me a piece of that!! Let's take this elevator to the next floor, I thought to myself.
I read everything I could online about mobile home park investing. Time was ticking, I had found the love of my life during this journey and wanted to get her hitched before she realized what she was doing with me. However, I made a promise to myself that I would never get into the position I was in only nine months earlier. I had to make X income before I would get engaged. That October I found a mobile home park for sale in a market I knew very well form executing a few leases in the area. I was able to meet with the owners, talk them down on price, and gained enough of their trust to seller finance the mobile home park. We closed on the property 30 days later. The park contained 10 mobile homes on 10 lots and a 3bed 2bth house. They agreed to a price of $215,000 and would take $25,000 as a down payment.....Perfect. The park had a low lot rent of $300 a month, two vacant mobile homes, and a vacant house for a total monthly rental income of $2,400 a month. My installment payment was $1,050 a month and tax/insurance of $550 a month for a total debt service of $1,600 a month plus water/sewer bill. Two months later, I had filled the vacant homes and house with paying tenants with lot leases and promissory note monthly payments. I also increased lot rent to $450 a month (area average). Within sixty days of closing, the park was had a monthly NOI of $3,800 a month.
This park, along with the cash flowing previous mobile homes, allowed me quit two of my three jobs...yay!! Came across a killer deal on a 20 unit apartment complex near my home. I was able to assume the note on this property and give the owner a decent amount of walking away money.... FINALLY!!! I had the income and confidence to quit my job as a broker the day we closed. Two days later I purchased a ring and proposed when she got home.
I never stopped expanding and strictly invest in mobile home parks. This year is the best yet so far. I don't understand why more people do not know about this industry. I love it.... The people are interesting to say the least but very appreciative that someone, like myself, would give them the opportunity to own their home. This niche has provided me with opportunity to completely change my life and gain my financial freedom. I am a huge advocate for mobile homes and see it as a means to the low income housing epidemic.
Hope to hear from you guys and share advice/stories of this great industry. P.S. I just purchased a camera to take video and pics of what I do and think it could be a great value to provide up and coming investors an inside look. Let me know what you think. Thanks
Just finished closing on my third mobile home park purchase and am loving it. Have 6 more in the pipeline coming up.
This journey started five years ago when I was a real estate broker working two other jobs just to make the bills. Showing commercial properties by day, bouncer at a local bars at night. That crap got old.....quick!
Granted, in 2012, being a new commercial RE broker in one of the worst real estate markets since the 1980's RE recession, was extremely tough. But, still managed to just get by with a house flip here and there on the side along with bouncing. Then decided to put up or shut up with the advise I was preaching to clients. I didn't want to be another statistic of the saying " those who can't, teach". Enough was a enough and it was time to get a seat at the big boys table. But there was one big problem, I had no real sum of money to invest....What to do?
It was at this exact time I came across a book called, " Deals on Wheels" by the late Lonnie Scruggs. This book ironically was among a large stack of books on my fathers bookshelf. Originally printed in, I believe 1992, it was small, large print, and had pictures. Figured I would give it a shot. While reading, I noticed the prices and costs for investment in the transaction of these homes. But, I knew the book was outdated and the prices must be considerably higher and out of reach for my modest budget since 20 years have passed since its publishing. However, I could not stop thinking about it and figured I would check out a mobile home park I pass by on the highway on the way to the office everyday. To my amazement, the mobile homes were still at reasonable prices. It was time to do a little digging and see what I could get. Looked around the park and spoke to the park manager. Found a home, 3 bed 2 bath with price of $6,000 but needed a little fix up. Now the teachings of the book became real....This could actually work.
Why take the risk myself? I had a coworker who was also younger and wanting to get some sort of cash flow in a commission based industry. Talked him into going in on the home 50-50. This achieved two things, allowed me to only put up $3,000 of my money and learn a valuable lesson in partnerships (that is another story). Besides, worst case scenario I lose $3,000 which I could get back in a few months if I picked up an extra shift or two at the bar. No bank would lend to me so I had nothing to lose.
Bought the home, got the title, and became a mobile home investor (with a partner). Now I had a home that needed a little fixing up and no money to fix it up. After thinking about it in the car before I left the sellers home, I went back in to speak with he and his family. It was March, the seller stated he would not be moving until at least June because he did not want to move with only four months left in the school year with two children. I asked where would he go until the school year ended? He stated he would go to a local hotel or something. "Well why not just stay here, save yourself the move, and rent this home until you want to leave?" I asked. After a short negotiation, he agreed to stay at the home for a rent of $400 a month on a six month lease. I did the adding and it came to a total rent of $2,400. To my amazement he gave me back $2,400 of the $6,000 I just gave him. Wow..what a deal I thought. I am now have only $3,600 invested into the mobile home with six months to get some rehabbing money for when he moves out.
Five months later the family moved and gave me possession of home. They did not get an money back for the last month as they were breaking the lease and agreed to the terms. I managed to save up $2,000, that my partner matched for a total of $4,000 to fix up the home. Installed new hvac, heat pump, paint, new carpet, and two scratch and dent appliances within two weeks. We are not invested into the home a total of $7,800. Put the home on market with a sign in the window and an add on craigslist. We had a buyer for $18,000 in four days. Buyer put $6,000 and agreed to a $450 payment for 4 years with 9% interest. My partner and I split the down payment 50-50.
I had seen the light. Two days later the park manager called me to come to his office. The park manager, very pleased with work I had done, approached me with an offer for two homes they had just received possession of. I bought one home for $1,000 (3bed 1bth) and a second for $1,400 (large 2bed 1bth). My partner had not interest in flipping other homes, so I purchased these with the $3,000 down payment I received just two days before. Long story short, a month later, I sold both on a rent to own (now a rent credit program) with total down payments of $7,000 and total monthly payments of $925. With the previous home sold with my partner, I was getting a total rental payment of $1,150 a month. This opened my eyes and allowed me to purchase and flip an additional 4 homes that summer for a total of seven flips in eight months with a monthly rental income of $2,400 a month.
With this monthly income and a small commission made on a sale of dentist office, I had $25,000 available to invest by the end of September. After this new found niche and wealth of first hand experience in mobile home flipping (mostly of what not to do), I did the math. The park I had purchased homes in was one of the biggest in the state. It had over 500 rented lots. With a $450 monthly lot rent and that many lots, the park had the potential to make $225,000 a month!! Get me a piece of that!! Let's take this elevator to the next floor, I thought to myself.
I read everything I could online about mobile home park investing. Time was ticking, I had found the love of my life during this journey and wanted to get her hitched before she realized what she was doing with me. However, I made a promise to myself that I would never get into the position I was in only nine months earlier. I had to make X income before I would get engaged. That October I found a mobile home park for sale in a market I knew very well form executing a few leases in the area. I was able to meet with the owners, talk them down on price, and gained enough of their trust to seller finance the mobile home park. We closed on the property 30 days later. The park contained 10 mobile homes on 10 lots and a 3bed 2bth house. They agreed to a price of $215,000 and would take $25,000 as a down payment.....Perfect. The park had a low lot rent of $300 a month, two vacant mobile homes, and a vacant house for a total monthly rental income of $2,400 a month. My installment payment was $1,050 a month and tax/insurance of $550 a month for a total debt service of $1,600 a month plus water/sewer bill. Two months later, I had filled the vacant homes and house with paying tenants with lot leases and promissory note monthly payments. I also increased lot rent to $450 a month (area average). Within sixty days of closing, the park was had a monthly NOI of $3,800 a month.
This park, along with the cash flowing previous mobile homes, allowed me quit two of my three jobs...yay!! Came across a killer deal on a 20 unit apartment complex near my home. I was able to assume the note on this property and give the owner a decent amount of walking away money.... FINALLY!!! I had the income and confidence to quit my job as a broker the day we closed. Two days later I purchased a ring and proposed when she got home.
I never stopped expanding and strictly invest in mobile home parks. This year is the best yet so far. I don't understand why more people do not know about this industry. I love it.... The people are interesting to say the least but very appreciative that someone, like myself, would give them the opportunity to own their home. This niche has provided me with opportunity to completely change my life and gain my financial freedom. I am a huge advocate for mobile homes and see it as a means to the low income housing epidemic.
Hope to hear from you guys and share advice/stories of this great industry. P.S. I just purchased a camera to take video and pics of what I do and think it could be a great value to provide up and coming investors an inside look. Let me know what you think. Thanks
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