All Forum Posts by: Sam Parkins

WHEN: Thursday, April 9th, 2015. Doors open at 5:00 pm

WHO: Jeffrey E. Taylor, Founder of www.MrLandlord.com speaks to Cville Area Real Estate Investors Group Monthly Meeting. Open meeting free to public, bring a Landlord with you. A rare opportunity to network with local C-ville Landlords before and after the program too. All investor niches and experience levels welcome - mobile homes, town-homes, condos, liens, apartments, single family, commercial - ALL ARE WELCOME!

WHERE: Quinn & Farmer Auction House (formerly Harlowe's Auction).

Address: 2109 India Road, Charlottesville, Virginia, 22901 • Tel: 434-293-2904 (Behind the Party Starts Here store).

Host Website: http://www.meetup.com/CvilleInvestors

Map: http://quinnfarmer.com/index.php/about/map

Heading north on Rt. 29 staying in right lane, going past Hydraulic and turning right before the Sherwin Williams onto India Rd. Or take the next right by Chillis onto Zan Rd then take the first right onto India Rd.

*HOW TO PROTECT YOURSELF AND YOUR INVESTMENTS AS A LANDLORD*

Recognize The 9 Most Costly Landlord Mistakes

Resident Selection Criteria and Fair Housing

How To Quickly Identify Problem Residents BEFORE They Move In

What to communicate to all residents to avoid future problems

10 Essential Clauses To Include In Your Lease

BIO:

* Author of THE LANDLORD’S SURVIVAL GUIDE and over 1200 published articles.

* Founder of MRLANDLORD.COM website, and the most visited Q & A Forum on the Internet by rental property owners.

* Chief Executive Officer of MR. LANDLORD, INC. – A national property management consulting firm – providing coaching tips to over 100,000 landlords annually .

* Rental Property Owner – He and his wife have acquired and manages rental properties ranging from single family to apartment communities for over 30 years.

* Trainer for a property management company while holding his real estate license.

* Guest on radio talk and TV shows including; CNN, Wall Street Journal, Smart Money, Personal Finance Magazine, Real Estate Journal, Business Week Magazine, and the New York Times.

* Conducted over 1200 seminars and workshops and has assisted thousands of landlords nationwide in increasing their monthly Cash flow and Resident Retention.

PSA Contact: [email protected] Beth 434.882.4664

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[email protected] Sam 434-987-6049

Even with a permanent foundation not all mortgage companies will finance a singlewide. Check with your mortgage companies to see what they'll finance. Even a DW has age restrictions (and the need for a foundation) for some mortgage companies. 

My understanding is that you don't necessarily NEED a license to flip mobile homes. In the eyes of the IRS I believe doing more than 4 in a year makes you a "dealer", but it's my understanding you don't HAVE to have a license to do so. I could definitely be wrong and don't want to advocate NOT going through the proper processes to get in business. 

Again, to my knowledge it is not a federal requirement but rather the licensing is through the state. At least in VA the licensing is through the state.

In VA there are different classifications of licenses, and maybe that's worth checking into for PA. I don't remember them off-hand, but suffice it to say that there's a "retailer" (think Clayton Sales-center), "salesperson" (sales), "manufacturer" (I don't think you plan on making the homes), and one other I think is "broker". Check with your state and you should be able to find that online. Try Dept. of Housing or some similar site (dept) like that.

We buy/sell in VA and do have a dealers license. If a federal license is needed then I need to know (if anyone else knows) and need to get it assuming it's necessary. We rented an office, put a sign on the door and it had a parking lot. I believe we got the "brokers" license; when I was audited they took the "parking" at face value. It was big enough for a mobile home but we never obviously pulled any there.

Long and the short is to check with your state authorities to see what they say. If you plan to have a serious business you'll make enough to afford a cheap office and you should look into the license. Good luck!

@Ann Bellamy LOL, thank you very much! :) 

@Steven J. We started moving homes in addition to buying and selling in 2013 (tried to vertically integrate though doing more moving now than buying/selling). 

I've moved pieces of junk (80's models) from VA to Boston (no kidding) and had i-beams "kink" and roll on me while on the interstate. (we had to hire a welder in rural PA near the NY border - about 350 miles from home as the rear of the home was about 2 inches from the ground because of i-beam integrity loss!) It is ABSOLUTELY on a case by case basis and you can see a LOT of what you'll be dealing with by looking under the homes yourself. Look for damage to the i-beam, running gear (axles), etc. Crawl under (easier after it's torn down) and eyeball down the whole i-beam to see any imperfections in the beam (make sure it's straight and doesn't "snake" or have bends). I look at all these things before quoting but also tell my customers that in rare scenarios there MAY be weakness or damage that I don't find until I starting putting a jack on the home and tearing it down. I've had i-beams bend over a jack before. I've had homes fall off of jacks as the beam bent. I've had tongues bend and homes fall. It's about 1/2 and 1/2 as to what I could tell the customer ahead of time and what I needed to relay in terms of additional cost (welding on additional supports) after I tore it down (before we moved it). This is probably a longer separate discussion but MOST of it is looking for damage in the beams and also seeing what your beams look like. If they're rusted or water is sitting or traveling under the home (and the age and thickness) chances are it may incur damage or be weak.

To be somewhat brief, I'll summarize a lot of what I've read here as there's a lot on the right track but not all is spot on. Please be aware: I run a buy/sell company in VA as well as a moving company in VA. I am speaking to the best of my ability to VA law. I am not an attorney or CPA or doctor or anything like that. I am a contractor and licensed manufactured home dealer.

• 1976 is the date most localities will stop allowing a home to be "permitted". An inspector once told me that if you kick back hard enough they'll allow something older but you won't make friends and I wouldn't plan to do it more than once. 
• In all my "education" I have never heard of something being "too old" to move. If it's got wheels a mover can pull it.
• Ask your mover for a quote for EVERYTHING. A big thing in the business is quoting "block, anchor, and level". Then you get your home to your location and they leave and you have to put on your skirting, decks, and do your hook-up's. It gets you where you want to be in price but it doesn't help you get an idea for your total budget. 
• Ask who's paying for block. Ask who's cleaning the old site/lot. Ask if they are bringing your decks. Ask if they are bringing your block. Ask if they're bringing your hardboards/shims. Ask if they're doing footers. (That's a big one that no one ever budgets for - a mover WILL NOT quote that in a "move/set" which is the same basically as "block, anchor, level" so make sure you know to get footer prices.) Ask if they are leveling the home site and or creating the required fall away from the home in the ground. Ask if they're installing vapor barrier under the home (in VA it's become code) Clarify who's responsible for what damage during transport. Ask if they'll strap down appliances. There might be a deposit for wheels/axles if they aren't on the home. If they're on the home make sure they don't go missing after delivery. Make sure you have a tongue on each and get a price for the mover to weld a new tongue on if not. Point is, there is a TON of stuff to clear. I can send you a copy of the "conditions" of my contract and you'll basically get a run down of all this. I'm telling you all this because I'm on BOTH sides of this. As an investor I got the short end until I started moving them. Now I've "learned" [been screwed] as a mover and my conditions have gone from 4 items to the current 16. Basically as I get screwed I add that to my contract so you'll see all the things that have arisen in moves. Ask about the pay schedule (half up front and half upon completion). I've had people try to withhold a reserve until the final inspection and I don't allow that. As a contractor I'm required to get it to code so see if that's the case with your mover.

@Bill Gulley is correct in that some localities will require a home to be a DW and to be within a certain age and will require a permanent foundation. The foundation (in VA) does not have to be engineered but you'll need to add anywhere from $5000 to $8000 to do it. CA probably has less rural areas than a place like VA where I am hence the difficulty (cost) in doing a move. Here MH are prevalent and most rural zonings/localities allow a SW and permits are around $250 or so.

Please be careful if you are attempting to tear it down on your own. Please only do this if you have some experience with similar type work. You CAN get a jack at Lowe's (cheap one's) for $50 (get a 12 or 20 ton) but there is a process to doing it. Honestly I don't charge much for the tear down portion ($250 to $500) so it may be worth the peace of mind to have the mover do it. IF YOU DO IT ON YOUR OWN PLEASE USE SAFETY STACKS AND GET YOUR WHEELS/AXLES ON AS SOON AS YOU CAN. If you get your wheels/axles on they'll "catch" the home if it falls, thus not crushing you. Take your stacks down intermittandly meaning leave piers (stacks) up in front of and behind the running gear to allow those to "catch" a falling home. I am a licensed mover and I've had probably 3 or 4 homes fall due to error and each time nothing has been damaged and no one hurt because of safety measures. TAKE IT SLOW AND USE COMMON SENSE - AND THE HOME WILL ALWAYS (REPEAT ALWAYS) FALL WITH GRAVITY. If it is not level it will go to the low point (forward, backward, or worst yet side to side) unless something prevents it from doing so. The tongue on the toter keeps it from going forward/backward, but your jacks/jacking have to be done in a manner to keep it from going side to side depending on the lay of the land. Jack the home up higher on the low side of the land to keep it from going that way when you jack the other side. And try to keep at least one side of wheels contacted to the ground at all times if you can. 

Summary of costs (these are on the high end - "going rates" in my area. We negotiate each item and can certainly bring it down) Try to get it in order for a SW.

• Tear down: $500
• Permits (vary): $250
• Footers: $750
• Concrete in footer holes (some localities require - CHECK ON THIS): $500 (varies by size/amount
• Move: $1500
• Set (block/anchor/level - anchor/strap/shims/hardboards included): $1500
• Block cost: $250 (in addition to bringing your old blocks)
• Transport decks (will NOT take big decks): Negotiable - around $500/deck
• Build decks/landing for inspection: $500 per landing (minimum landing and usually 2 needed)
• Hook-up (water/sewer/electric): Can vary widely, but assuming "standard" hookup it is $250 labor for each plus material. Budget about $750 labor and $500-ish for material. A mover needs to be licensed to do these hook-ups. 
• Skirting will vary, but expect at least $750 to $1000 for material and $250 to $500 for labor. MOST of the time skirting is hard to re-use from one location to another. It is cut to size when installed so the best chance to be able to re-use all of it is to set your home in the new location "lower" to the ground than the previous. If you asked me to re-use each piece I'm probably going to charge you enough in labor to make it worth while to get at least new skirting panels and try to reuse the skirting kit. My extra time sorting out all the panels by height to figure out what to use where is not worth it (for me). 

What I'm getting at is that you can easily spend over $6000 in a move paying someone to do it ALL for you. It's not cheap. A DW is similar but could be about double the cost of the total above. Around $8000 to $12,000 depending. The last move I paid for before moving them myself cost me slightly over $6000. I paid the mover to do it all as I wanted a realistic cost to know what I was working with as I started to price things out myself for my moving business.

I think I've covered most things for you. Again, I'm more than happy to send over my contract so you can see what you'll be working with and have the resources available to get things right. And I also tell folks it's basically the same cost to move a home 10 feet as it is 10 miles. It's the same amount of labor just less travel/gas. I don't really start increasing my move/set costs until I get to a 50-100 mile destination or more. I don't quote by the mile (some do) but rather by the job. If you tell me to move one 300 miles I'm going to add gas/labor time and possibly a hotel and per diem cost. Still it's not thousands more for the extra distance so if you get a long distance pull make sure to quote a short distance move with the same mover to see how much they're increasing your quote. I'm going to quote it by telling you it's $3500 to move/set within 50 to 100 miles and to go 300 I have to add $750 and explain it's due to the above additional costs. 

Hope all this helps! (wow - sorry for the novel length response!)

I'll add to my post earlier by mentioning the seriousness of your investing. All points are accurate as to where to find deals and I'll add more, however I'll say that should you want to run a SYSTEMATIC business look into mailing. And by all means, we did them ALL not just one.

• Yes, drive by parks and look for for sale signs
• YES! Target your park (if you want a park home) individually with flyers if you're not mailing. We've mailed AND delivered flyers to targeted parks.
• Almost as important (maybe more) befriend the park owners/managers. They are your key!
• Search Craigslist, MH Village, other Classified sites for available homes
• Newspapers and more importantly weekly periodicals for your area. The type they sell in the gas stations (Penny Savers, etc.)

Once you get to enough people (if you're working hard maybe about 2 to 6 months) and you start to buy some homes and follow through (build trust) parks will start sending you leads as well as others.  However, if you want to systematize your business (when we got to full throttle we ran out of homes to buy in our target counties as we bought all the one's we wanted) then you'll create a business that can run on it's own if you're able to use mailings. You'll create leads when parks don't have any, you'll have widespread name recognition creating more referrals, etc. There are some great examples of these types of systematic businesses - look for very successful land wholesalers or even home flippers. Further, we've gotten leads from bank tellers, gov. employees, park managers, other investors, etc.! The mailings will also get you to vacant and out of town owners. You'll get some GREAT deals with folks that just need their home OFF of their land/property in addition to hitting all the parks if you mail to personal property lists. So you know, most counties we mailed to ended up at about 2500 to 4500 mailings once we filtered everything.  Hope that helps. And for homes on private land, you'll have many that are still personal property and you'll have many that are real property. Unfortunately, there's no great answer for targeting to buy these homes unless you wanted to do drive-by's or mail to both personal and real property. You can filter your lists in both personal and real to uncover the ones most likely on property but you'll have a few more steps. And finally, if the mobile home is personal property it has a title (like a used car). If it is real property then technically the title would have been shredded by the DMV and it has become part of the land just like a house is part of the land. In that case, no title but it should be named on the deed. In cases like that you can still buy the home, but make sure you know what you're doing as you will NOT be able to get another title for it. Some buyers will not buy unless they receive a title even though you can use a Bill of Sale which accomplishes the same transfer of ownership in the eyes of the DMV.

If you're serious then call your target county (pick a county or locality) and get a list of homes as personal property. You can then sort that list and mail to home owners that have them as personal property - not real estate. 

For real estate mobile homes (title turned in and more than likely a permanent foundation under the home) they'll be listed in the county as real property. 

Depending on your locations the counties may think you've gone insane with your request, so be prepared to explain to them exactly what you want/need. And I believe you can only request the name & address as that's public information. Again, you can mail merge name & address into your mailing and get the job done after you get a list. 

I'm sure I'll be corrected if wrong, but I believe under the the new laws (Safe Act/Dodd Frank) that a seller may owner finance their own property (personal residence). I also believe that one may seller finance up to 3 a year before the laws kick in but it's been about 10 months since I reviewed the laws...and I am speaking for the laws specifically for my state which is VA. Each state (I believe) enacted their own laws under the federal mandate or something like that so it's worth checking out your state.

For the record, there are a TON of safe act/dodd frank forum discussions on BP. 

Further, to answer the question specifically, have a solid purchase agreement and promissory note, a copy to each you and the seller. You don't have to have an attorney close the deal (think used car) but you may want to have an attorney review your docs before using. Further, make sure that the seller's own the home outright. It is NOT LEGAL for ANYONE to sell personal property if they do not own it. They can use payment from you to pay it off up front, but they can't finance to you if they're still paying on it (making payments). Though this is okay in real estate (subject to) it's not with mobile homes since they are personal property. 

I would also request a photocopy of the title to verify that they are in fact the owners and that they aren't sitting on an open title either. (Meaning they transferred it when they bought it.)

And yes, the Safe Act does specifically mention mobile homes. Again, there are a lot of discussions on BP that address this. 

If you're buying for your in-laws you may consider letting them go directly onto the contract instead of getting in the middle. If you're in the middle you stand to be scrutinized by the park as well as could be getting into cloudy territory via the laws. If you plan to make money then that's one thing, if not then just do the good deed by helping orchestrate the whole deal/process for them.

I think I speak for @Bill Neves as well as most of the folks dealing in parks. Your lifeline is the park owner/manager and it is paramount to create a good working relationship there. 

Do your best to negotiate rent concessions (promise them you won't move a home out in exchange for 2, 4, 6 months of rent concession if and when your home is vacant. They keep their park filled and you get a little break when you get turnover as ultimately you will. 

That said, the BEST advice I could pass on at this point is to GET THE AGREEMENT FOR CONCESSION IN WRITING!

I had 3 vacant in a park last year (1 rehabbing 2 had just moved in there) and on the 15th I got notice that a mother and daughter tenant of mine were both leaving (each had a home) and a week later I had another TWO tenants vacate - it was my month from hell. By the end of the month I had 7 vacant. I had previously had a rent concession agreement in the park that started off as a lifetime concession. I got a little too much on my plate and had a couple homes vacant for a while so it was re-negotiated to 6 months and then ultimately to 3 months. I did not get this in writing. After my 7 homes became vacant the park called around the 1st and asked for lot rent (they demanded it) and after a nice heart to heart with them they ultimately decided that they wanted their money more than they wanted to keep their word. 

I'll never forget the last thing they said: "We don't want to work anymore concessions. It costs over $5000 for someone to move and set a home, we don't think too many park residents can afford that so we're going to make you pay the lot rent". 

GET YOUR AGREEMENTS IN WRITING! Hope this horror story helps others to keep from getting the same end of the stick. And before the judgement comes down, this was a relationship over 3 years old, lots of history and they had actually basically become friends of mine. If you're going to run a business in parks (another conversation for another day - plenty of posts/forums on here of the pro's and con's) get your rent concession agreements in writing!

I may be wrong and am not an accountant or tax professional, but I believe we've always counted the move as an expense for tax purposes. 

In terms of ROI and Return, I've included it in my calculations on the basis as with other expenses.

In terms of depreciation, I don't know but doubt that the move expense can be counted toward the home value for depreciation. I would think you would have to go (depreciate) on the original purchase price as indicated on title at transfer at the DMV or by your Purchase Agreement (or both hopefully). 

Hope that helps.