All Forum Posts by: Sam Parkins

Owner financing seemed to be the most common and used exit until recently due to the act. I'm not the expert on the contracts and or an attorney, but some folks have switched to a lease/option or a rent to own to comply with the law.

It seems selling outright may work if you're getting them so cheap. Are they real estate or personal property on land, i.e. are they able to get financing?

The harder part with mobile homes is obviously getting the buyer that can get financing or has the big wad of cash, and I would assume that's why the "payments" exit is commonly done with some sort of payment. That's why we do payments as there just aren't a lot of buyers able to obtain financing or that have the cash to buy (on a quick turnover).

In terms of rental, it's feasible depending on your level of involvement and or your team. This response is VERY over-generalized and obviously from my point of view and my personal opinion, but suffice it to say that renting the homes can be time consuming as well as expensive. The materials in the homes are not the same quality as stick built, so they deteriorate much quicker. On the upside, the materials can be replaced for less but you may have to replace more often. In addition, the little things in the mobile homes can certainly "nickel and dime" your investment. To put it bluntly, I've only started to consider a rental exit AFTER establishing a solid and full time contracting team.

Again, my personal views and you will probably get GREAT input from others on here. There are some very knowledgeable experts on mobile homes on Bigger Pockets!

Nathan Huzzey, have you tried talking to a different person at your county (locality) office to discuss the replacement idea. I usually get 5 different "answers" from 5 different county employees each time I call.

I ask this because as you've discovered with the excellent replies, rather than drop $10,000 to $15,000 into the home there to fix it up, pulling in another home probably helps you out. If you can pull in a $5000 home with little work needed you'll pay for the home and probably about $3,000 to $5,000 for the pull and set. So yes, it's expensive in it's own right but you should be able to get a newer model (assuming the dilapidated home is older) that should hopefully suffice to be less of a "money pit" for you.

As for the county, it is certainly different in different areas. In my area, even counties that require the "acreage" rule will allow homes to be "switched" out. As Marcy Albrecht pointed out, the grandfathering in my area allows homes to be "switched" within a given time period to still hold their "grandfathered" status. i.e. one would get 30, 60, 90 days or a even a year's time in some cases to "replace" the old home and still get the permit to reside in that home without giving up the acreage.

It may not be the case in all localities, but most counties will take an upgrade on the mobile home "eyesore" even if they don't want more mobile homes in their area.

Sean D. has started discussions recently about investing in mobile homes in the L.A. area. It seemed apparent in his forum post responses as well as from the response above from Karen Margrave that you would probably focus on more rural areas of your locality. The lot rents are high in the area and to make your numbers work and not lose your tail holding on to a home too long it may be best to find the lower lot rent areas.

It seems the conversation touches on some aspects to actually raise the value of the homes and create something EVERYONE wants rather than a "stigma".

Along those lines, and maybe best left for separate topic, how hard would it be to go solar in a park? How hard would it be to build up instead of sprawling? Ken Rishel how complicated and expensive is an "ash" sanitary system as you describe it?

There seems opportunity to provide a green product in this day and age where localities usually shy away from the old model of parks. There are certainly niche opportunities in the industry for smaller built self sustaining homes. Is there opportunity for a green park? One that may hold value and or even appreciate as some of the respondents have posted on this topic?

Joe P I feel Jim Johnson is exactly correct but believe that to be the case for houses. It's a perfect system for those buyers/rentors slightly more "do it yourself" to politely put it.

One of my mentors uses a system similar to Jim's and goes a step further with an automated message system. The message has to be listened to and then the person can get access to the house on their own.

I think this is a great system and I KNOW both work for houses, however I found that they don't necessarily work with mobile homes. And there are plenty of things I could say about why, however due to the topic presented I will say that I've given all the information I KNOW on a home in any given ad/website post/etc. and STILL get a TON of phone calls on each property.

The more I elaborate on my ad and give all the information needed the "dumber" my phone calls get. That's when you get the calls from folks that have nothing else to ask than "Is it still available", and I agree with the response already posted about just chatting.

However, I've got a theory on why this happens and what to do about it. I think the typical person calling regarding a mobile home is used to being in a rental. I don't think many have had the opportunity placed in front of them to take ownership in a place. The systems set up by landlords are usually much different than set up by brokers/owners/investors/etc, especially pertaining to mobile homes. I've run into a lot of individuals owning and renting many mobile homes and their "system" has all been the same. Advertise for phone calls and put the first qualified renter in place. Therefore, it's safe to say that the mobile home renter turned buyer for your purposes has been fairly conditioned to call a number for each time they want to rent. To kill the point, can you remember a sign in a mobile home with JUST and email address or website address that was with a landlord NOT an investor? ALL landlord's I've ever come across just put a number in the window thus conditioning the phone call.

To "fix" my phone call problem I hired. But it doesn't have to be paying someone to sit around answering phone calls. In the beginning, I fielded the phone calls, immediately "extracted" their buying criteria and urgency, and immediately sent them to my contractor. So what I did is had my contractor that works on homes for me answer phone calls and subsequently show properties.

It's not rocket science, but I think knowing the WHY behind the "problems" can get you a long way into knowing what solution to take. Basically for all my trial and error (and sitting in your shoes as a one man show fielding about 10 to 60 phone calls a day) I found that I'll NEVER eliminate the calls, only figure out better ways to handle them. I'll end by saying there's a LOT more to this and I haven't addresses all of your "concerns", however handling the call volume is a BIG piece of the "buyer puzzle".

Purchase your homes with a standard purchase agreement. Anything you like.

Then "wholesale" by assigning your contract with a professionally done assignment. You're money's worth in a well written contract is as important in the assignment as is in the purchase agreement.

As for value, call every mobile home seller you can get your hands on and ask their selling price. Drop it in a database with all the pertinent information and keep track. Call them back weekly to see if they'v sold. You could front as an "informational" collection or whatever you feel comfortable doing. After enough time has passed you'll see what OTHER people are paying for these mobile homes based on location. Thus you'll see the market value.

Then when you buy enough in specific areas YOU'LL set the market value of the homes.

Hope that helps.

Yes! If they can't even call you back on a given day/time who would ever think they could actually make a payment on time???

"Skin in the game" is a big factor for us as well as the screening process. However, we set up a lot of "hoops" to jump through as well. Things as simple as the following will give you some insight into their overall responsibility:
1. Always have a buyer call us back at a set time on a set day for follow ups. For example, here's our application (if not filling out on the spot) please fill out and call me at 2:00 on Thursday for the follow up. I want to see how well they deal with "deadlines".
2. Similarly, have days/times for them to physically drop off applications. See if they hold their time.
3. Check references, employers, and landlords.
4. Believe it or not I always explain to folks how they can get OUT of our deals. The psychology of a buyer when buying just about anything involves buyer's remorse and a trapped feeling. The tenants with buyer's remorse we try to help with congratulation letters/notes/calls. We try to reiterate the fact that they've got a great opportunity and we're there to help them. The trapped feeling we try to eliminate with giving them the "out" during the contract signing. We do this because the trapped buyer or the buyer that thinks they got "had" will ultimately not be happy, thus will take LESS care of the place and will not have the desire to keep moving forward in the process; i.e. if times get tough they'll bail.

As such when we get a call from a committed buyer that needs help, (and this is NOT recommended) we'll be willing to help them (to an extent and within reason) on a given month allowing them a week or two late payment (1 time) without penalty. IF they are late because of financial hardship and have been a great tenant, we won't charge that late fee because it would cause the "snowball" effect and they may never recover. We provide this service to the above qualified buyers that are legitimate and great buyers that understand the opportunity and understand the whole situation and this usually has happened in the case of job turnover. In our experience doing this almost ALL have gotten back on their feet at their new job and just needed a little bit of help for one month. Our screening process and buying process helps us to identify these folks and try to work solely with them.

Jon Klaus One of my very good buddies runs a company that wholesales and flips land. Obviously being cognoscente of the safe act and regulations surrounding financing, they have a great model they've adapted from Jack Bosch in Arizona. I'll cut to the chase.

They've found that for very little down (or a small security deposit if you're just renting) and a low monthly payment that folks will buy just about anything. They've financed land for literally $15 down and $100/month. Again, if going that route make sure it's legit, and I'm sure you've thought about an exit like this but I figured I'd throw out some numbers for you. Often, a piece of land like this is purchased VERY cheap and has very little use. What they've found though is that buyer's will come out of the woodwork just to own something for so cheap.

If the thought is to get someone in there that would put a mobile home on it maybe consider deferring the first payment for them to allow them the buffer of cost to get a home in there and set up, as that can be rather expensive. I would think since you have a well/septic and one would not incur that cost ($10,000 or so) that there would be a LOT of interested parties willing to put a home there. Heck, I'd be calling right now if it were in Virginia!

Just a shot. Don't know if that helps but figured I'd try for you!

Getting the right mobile home deals will certainly build your cash flow. Do a traditional Lonnie Deal and you'll have your investment for the property covered by the down payment and it will all be positive cash flow for you.

I would look up your state's requirements for the Safe Act and make sure you comply or take steps to comply with the act before jumping into the mobile home deals. That or just rent the homes.

I don't think you're missing anything here. Unless you can get financing on a house/duplex/etc. with little down and cash flow MORE per month with your available funds than you could do with multiple mobile home deals.