How did you make your first mobile home deal?

Question

Bill Neves · Answer

Check some of the previous and extensive posts for more info.

Thumb nail version - You used to be able to buy a mobile home for whatever you bought it for. Then  just take a down payment and agree on payments of x amount monthly for y months. If the buyer could fog a mirror, good to go.

After the 2008-09 housing implosion, Dodd Frank Act added many hoops to jump.

Including, pre-qualifying buyers to ensure they have the ability to pay. Not too much debt load, less than 43%. You can't discuss payments if you finance. You have to use a MLO Mortgage Loan Originator who qualifies the people.

If you don't do that, the buyers 'could' come back, down the road and say you didn't qualify them properly. Penalties could include - returning down payment, 3 years of payments and repairs.

You could lose out big time on your deal.

That being said - no one has gone to court, won a case, lost a case, been penalized, etc. But due to the potential impact, investors are very cautious. Use a MLO and you should be fine. Find one at a local investor club.

Have fun!

Natalie Kolodij · Answer

Hi @Taylor Haywood

I am only just now beginning to send out marketing. I mostly find on CL or people find me on CL. And I pay a title company a few hundred dollars to do the paperwork because it's more time than I care to spend on that. I just write up a bill of sale when I buy. It's just like selling a car largely.

My first deal found me from my "I buy mobile" CL ads.

Inherited really nice double wide listed on MLS for 23k- and hadn't sold. He contacted me and offered him $6,800 and he took it. Flipped that one for $15k - not a HUGE profit but my first try.

Second one I have found was  from an ad posted on CL. Single wide, beautiful area, nice park - mobile needed work owner just wanted to walk away.

I paid $50 for it

Paid a contractor $1,500 to big big stuff

And I'm going in this weekend actually to do all the painting and finish work.

Have  a potential buyer lined up for $12,500.

(This all happened between Saturday and today)

Looked at one yesterday where again- he emailed me from my "I buy mobiles " CL ad. It's in a magical hidden park- it's more an old man who owned a lot of land and developed it little by little so its lots of little coves of mobiles. Big trees super nice. Any how - house kinda sucks but its fixable.

He wants $3,500 I offered a grand - he decline hahaha BUT I think the park owner will let me rent it out so once I confirm that I'm going to counter him with $2k.If I can buy/rehab it for under 5k and then rent it for $1000 a month less the 550 space rent I'll be happy.

So that's where I'm at with mobiles. Also after buying one for $50 everything in life seems ridiculous. My phone bill cost more than that house. I own face cream that costs more than that house.

Any how- My suggestion is offer low- don't get attached to deals. I come across more than I can manage right now. Feel free to message me if you have specific questions and I'll see if I can help :)

Natalie Kolodij · Answer

Ha these are the tricky parts of mobiles.

I look at everything I can that has sold recently on MLS to get my comps (same as you would for a SFH) - but ultimately most of them don't sell through MLS. So insert an educated guess here based on asking prices, experience, and add a buffer to your potential profit for "woops that guess was wrong".

The one I have now was $50. - Good deal. Pretty safe there.

Since there's no way to know how much homes on CL actually sell for what I do is call about almost all of them listed . If they're not flexible on price or desperate to sell really...but I see the ad down within a week or two...I'm assuming the home sold and was priced well. (since they're not desperate they likely wanted/took close to asking is kind of my theory)

So....ya that's basically what I'm doing. Oh as for parks....I call and talk with managers tell them I'm looking to buy a home in the park. Ask questions. Tell them I've done it before and have a contract for non-occupancy (if its 55+ I can't live there...but I can own it and often once you explain it to them they're okay)

I MUCH prefer family or locally owned parks to larger parks owned by a corporation.

Look up the tax record for the park- public record from the county assessor website. That will give you the mailing address and owner of the park. That helps you know which are locally owned.

Good luck!

Steve Vaughan · Answer

I used to buy for cash and sell on payments.  As @Bill Nevesmentions about Dodd Frank, I don't know if that is trouble now or not.  The % profits were huge, just small numbers like @Natalie Kolodijhas experienced.  Great idea posting CL ads. This was before craigslist was outside of SF. Also allowed me to skirt rental rules in parks.

Run your UCC title searches.  Easiest obviously if registered owner and legal owner are one in the same.  I used to do my closing & negotiations at my bank.  I would fill out a personal check and hand it to them.  An odd amount like $3,741.  Worked better for me than just throwing out numbers.  They would take the personal check because they could verify it would clear right there at the bank.  They brought the title with them of course.  Like buying a car!

Justin Escajeda · Answer

Call people who are advertising selling their MH on craigslist, ive bought many homes from CL.  You can get them for nothing a lot of the times (aside from title transfer fees or maybe owed back rent to a park).  Find the people who cant afford their lot rent anymore, or talk to park owners to strike a deal.  Park owners do not always like to deal with investors, but they tend to like it better if can guarantee lot rent.

Marc Faulkner · Answer

I found my first deal in the local newspaper.  I believe it was a 1988 Fairmont 14*70(Box) 2 bed/2bath, metal/metal listed for $5,900.  I offered $4,000 cash and the seller needed the money so she accepted.  I gave her a $500 deposit with the promise to pay the balance in 15 days or once she was moved out and the place was cleaned.

She called early and said she was ready so I went over there with cash in hand.  I did a walk through, which my Purchase Agreement stated I would be doing before final payment and, the home and yard were left a mess.  I pulled out my contract and told the seller that I expected "the home to be broom swept and wiped down and the yard and underneath of the mobile home to be free of all debris."  I pointed out that all of the garbage in the yard and stacked up in the shed were not going to cut it.  I gave her the option to clean it up or to reduce her price by $500.  She choose to reduce the price by $500 and get out of there.  I spent a couple of hours cleaning up the place and, while I was mad at the time, I was happy once the job was done as I have no problem working for $250 an hour!!!!

Curt Smith · Answer

Bill did a good job of tersely summarizing Dodd Frank in general.  My reading of the bill found references specificly removing use of an exemption from being licensed re financing of a "mobile home".  Meaning an investor is bared from offering financing if it's a mobile home.  You have to be a dealer (and licensed to originate loans) or a park that got licensed (few have).

I dropped the whole idea of Lonnie deals and moved to double wides on their own land.  A bit more cash but free of Dodd Frank bulls eye and easier to rent to own and seller finance.  Lots of nice familes want a double wide on land via rent to own and seller financing.  Dodd frank limits me to 3 per year for me, 3 for my wife etc.  And use qualify to 43% DTI and use a LMLO.

Bill Neves · Answer

My first mobile home deal.

I found one for sale on Craigslist for $6500. I offered $3000 and they countered at $4500. I said $3500. They said $4000 and we bought it.

NOTE: Most sellers will drop a bunch on the first round. Or tell you the price and say but it's flexible. NEVER say that when negotiating.

WE DID NOT TOUCH IT. It was in great shape. Older 1973 with AC, furniture, lawnmower. We sold it 7 days later for $9900. $2500 down and $250/mo for 3 years @ 12.75% interest.

NOTE: This is considered a Lonnie Deal which are not allowed any more due to Dodd Frank rules.

Have fun!

Natalie Kolodij · Answer

@Mark Gibbs

It won't let me message you for some reason please shoot me a pm.

Thanks!

How did you make your first mobile home deal?

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