Some Mobile Home Questions

[Jesse Ramirez]

I just had a couple question's on mobile home investing.

Are Lonnie Deals the primary method for mobile home investing?
Are there any other popular method's that I'm unaware of?

[Jim Johnson]

Greetings and welcome. I buy and sell several mobile homes every month. Some... actually very few are flips. Most of the homes I buy get resold on financing I carry. Most call these "Lonnie" deals after Lonnie Scruggs. I have studied Lonnie's books and also have a couple of mentors that are local to my area I have learned under. In this thread I will be happy to answer any questions you might have once we have entered that phase of the investment. I will post to this thread as I have time and it will take several days to finish.

So lets find a home and make an offer.

There are several ways to acquire a mobile home and in here we will talk about the ones i use.

1) Drive a park and call on the for sale signs. This is how I find about 25% of my homes.

2) Post an ad in the newspaper. Costs but works.

3) Develop a relationship with the park managers and they will sell you homes, tell you of homes for sale or my favorite... give you homes. If they give you a home you might have to pay some back space rent. This is how I get about 75% of my homes.

Before making any offer talk to the park manager and ask if the home can stay in the park. Also make sure if something has to be done to the home you know how much it will cost. You should also know about the holding time for each sale. My average holding time for double wides is 10 days. Single wide 3/2 (3 bed / 2 bath) is about a month, and a 2/2 or 2/1 is about 45 days. You need to know that so you can figure out what space rent will cost you.

I have a pretty simple way of making offers and I hope I can put this across in writing. Bear with me.

A 3/2 single wide built in the mid 80s- 14 x 70 that needs no work. I can sell this home for payments of 300 to 350 per month for a total of 12,500 to 17,500. As a rule I try to be out of my total down-stroke at the longest in 18 months. Space rent is $450 per month.

So- 300 x 18 - 450 = 4950

If the home needs anything it comes off that price. Most of the homes like this I will have a total of $3000 or less in by the time I have bought, fixed up and sold it. If the home is new and nice I might pay a bit more. The lower your down-stroke the better your return so keep it small! Do not get attached to having to own every home. It is business. When an offer is accepted I give them $100 via check and sign a purchase agreement. The get the rest when the home is delivered to me clean and empty. I always get the title at the closing and always look at it before I sign a purchase agreement. In Colorado there are taxes that get paid each year so I always check for this figure and bring a copy of what is owed to the closing. I deduct that from the sales price and write them a final check.

Remember when offering to fully take into account what needs to be done to the property and start low! Most people can not afford the space rent once they move out so you are doing them a favor by making that payment.