All Forum Posts by: Chad C.

My state offers some lending programs for modular housing. I have found out that the difference between a modular house, and a mobile home is just the go to which it is built. The two may even look identical. One dealer said he could build a single wide to code, and it will be a modular home. Does anyone know what the price range is for building a single wide to a modular home status?

@Bill Ayers @Andriy Boychuk    the homes are 20-30 years old, but have new subfloors, floors, ac units....

 It is hard to spend that kind of money on some old mobile homes, it's also really hard to put a value on them, any suggestions? 60 months x rent?  Right now it's more like 20 x  rent.  This is my first rental property, and I have also been looking at getting my own piece of land and subdividing it, then placing six mobile homes on it.   My returns will be much better on that investment, because I wouldn't be giving money away for lot rent, Each home would have about an acre of land,  and I could charge 30% more rent,  but I think I will be doing good getting a decent trailer on my property for less than 20 grand. 

@Ken Rishel

@Ken Rishel from what I have read, as long as I am not owner financing more than three deals a year,  I am within the constraints of the law.  But let me ask you, what organization enforces these  laws?  Are they out looking for lawbreakers, or is it just on a reported basis? 

This is the deal on my plate. 5 mobile homes on $230 lots for $65,000

Total Gross Income is $600 + $600 + $750 + $760 + $1000 (2.5 year lease purchase on $1000 home) = $3,710

Total Monthly Expense: ($230 Lot Fee) + (30 Insurance) + ($75 Vacancy/Maintenance) = $335 x 5 -75 for no vacancy/maintenance on lease purchase=$1,600

Net Income: $3710 - $1600 = $2110 x 12 = $25,320 / $65,000 = 39% ROI

 The homes are old, and a very little value, but have been renovated/ new ax units, It seems like a good opportunity, I can't find many parks not even allow subleasing. Any opinions?

@Jeff Filali that's a good idea! Why do they call you, do you have a craigslist ad, oh I see your website now.

@Wayne Brooks I have read deals on wheels, he mentions "matching" calling potential buyers that he has spoken to before, but he always had a home in his name to sell first.

@Ralph R.  I have, not to make this thread about FD, but from what I've read I could do three a year no questions asked, and my wife do three-year.  If I desire to do more than that, there are appropriate ways to do it.  I'm not really going there, but I'm not sure there are really people inforcing it anyways. 

@John Arendsen  do you find investors not as interested in holding notes as they once where?

If all the money is in the markup, why not just deal mobile homes? Not sure how people are getting financed for a used MH.  I need to stop by the local lot and ask them. 

I'm still really interested in doing it. When I use my HELOC I would pay $50 a month for the trailer, and receiving 500 from the purchaser, that is a stellar return, and I feel safe with a down payment, and always staying ahead in cash flow. I'm just a little worried about the home sitting empty for a couple months before I sell it, and it might cost me a couple months lot rent.

I put out a test add and had many inquiries. Ideally I could pick a client and buy a MH for them, and help them place it on a lot. It would be nice if they found a home of there liking, and I negotiated the price from the seller. This would eliminate any holding risk I had, but I'm just not so sure it is feasible. It's much more of a juggling act for everything to align. It would be much more cut and dry if I had a home on a lot, but really limits my market. Anyone have any insight to either of these methods?

Another thing I noticed about these deals is that while you make good returns on marking up trailers 80% it takes the length of the note to actualize it. 10k MH sold at 18k is a 80% return! over 4 years is 16%, With 12% interest returns increase to 21%  not bad for not being a landlord, and these are the best unlevereged returns I am seeing

Selling at a 80% markup:

10k trailer for 18 is possible but hard to find those cheap deals. 

15k to 27k is more of a typical buying price but getting harder to sell

20 to 36 can be bought all day, but don't think many will buy at that price also term length has to be extended for affordablity, decreasing returns.

just called a local cu and they have 90%ltv, interest only. Rates at prime. Seems like a winner

@Greg S.  what is your consideration? That you will not be able to get other loans because of the higher monthly note? 

@Greg S. @Lee S. Greg I think you are correct, 1% is the min. monthly payment. On a 20k draw your payment is $200. It's not interest only, it's 1% of principal. After draw period it becomes a fixed rate. 

So it's not interest only, it's principal only?

Good calculator here

http://www.bankrate.com/calculators/home-equity/loan-re-payment-calculator.aspx

@Lee S. haha OK! They are closed now, so I will call tomorrow. But what I am finding out that it is 1% a month! I don't know how a 12% APR is attractive to an investor. I guess if they are paying off their balance each month it could be.