I was out to do my first Lonnie's deal but..

[Eric Kim]

(Hello, biggerpocketers) I got lost and very discouraged.

There are limited numbers of MHP in my area. I drove through all of them, and spoke with the most of owners and managers. One of the managers almost laughed at my $5k budget, and I was told the average price of the home was $30k in the park. It seemed impossible to find the deal in my budget. Another problem was, most of the parks had $500+ lot rent + water sewer and trash. They also required one month rent amount for security deposit. I was surprised at how expensive it was and owners were firm about the rent.
Weeks went by, I got calls from 2 parks telling me they had houses within my budget. Both houses were 12*65(?), 2/1, very old(70s), ugly, dirty, and saggy. On top of that, they were missing the most of the appliances. And one park owner told me that the house may need some modification to comply HUD code on MY expense. Otherwise when I sell the house, it would have to be removed from the park!
Now, this does not make sense to me. How can I sell an old 2/1 mobile home on top of $530 lot rent to someone where 2/1 apartment starts from $750? Do some people prefer to finance old mobile homes? How can I convince them? Or is the market in my area not acceptable to invest in?

I am sorry about the long and unorganized post.
Please, guide me to the right direction..

[Donna Gilbert]

Hi Eric,

I understand your feelings of discouragement, but allow me to share a very recent success story with you and perhaps that will make you feel a little better.

I, like you, started talking with park managers and also got very discouraged. I had one park manager show me someting in my price range (also $5000) that he should have paid me to take off his hands.

I then realized that there are many parks out there (at least in my area here in Denver) that buy homes from residents, put a minimal amount of money and work into them and then turn around and finance them to buyers (often at very lengthy terms). So, in essence, I was competing with them.

I recently purchased a 3/2 that was FSBO for $8000. It was in good condition, just needed cleaning and replacement of blinds. I re-sold it to a family 2 days later for $14,900 on terms.

The lot rent for the park was $522 and the family that purchased the home had been renting an apartment for $900 a month, so they wanted to pay less than that. We were able to structure the note so that their payment was $860 a month, including the lot rent, and they will own it in 5 years. They are happy because they will own something and the home has storage sheds and a fenced yard (something their apartment did not have).

It is possible to find homes in your price range. You will have to "drive for dollars" as Lonnie suggests, so that you can buy directly from the owners. And, you will find people that are willing to pay at least the monthly rent that they are paying for their apartment, if not more, since they will own it.

Hang in there. It takes time, however, once you get the hang of it and know where to look, the deals will happen. We are working on our second purchase - a 2/1 for $5500. Also, a FSBO.

Good luck!