All Forum Posts by: John Fedro

Hi all,

Congratulations, Justin!! The credit all goes to you. Great work pulling the trigger and helping this seller and getting the deal to this point. The pics look quite good as well. I like the size of the home, the kitchen and layout. Keep up the daily effort and don't forget to keep making offers on more homes even though you already have this one. Aim to keep your buying funnel full. Keep us posted and if you have any questions never hesitate to reach out. Great work again. 

Talk soon,
John

Hi Justin,

Thanks for reaching out. I'm curious to see what example folks will talk about in this thread. Your question is not uncommon and very valid.

You are correct in that much of my material is focused on lower-end housing that is more affordable to the masses. With that said there is considerable profit in what you are discussing as well.

Whether you're fast-turning a home for a $3,500 profit or a $35,000 profit, it is nice to have the influx of cash. In many areas of the country there are a lack of cash buyers or bank approved buyers at any one given moment, making reselling for cash a competitive market place with $5,000+ cash being a good profit.

What I believe you are discussing is the higher-end manufactured home marketplace. These buyers typically desire modern and move-in ready homes for their money. Typically 2 things can cause a manufactured home to be worth $60,000+. Either the home is newer and therfore simply worth more or the location of the home is driving the price up and up. In very high-demand areas (such as San Diego, and many other places as well) a "normal" mobile home worth under $20,000 (in most areas of the US) can be worth 5x that amount simply because of the location. Additionally the lot rent will be $800+ monthly.

You touched on the main issue above. Are local comps selling, and are they selling fast?

Regardless if you are fast-turning a mobile home in New Jersey or California, the demand for buyers must be verified and substantial.

With us all knowing that the real estate market could change at any moment, it is a math problem when it comes to fast turning or flipping a mobile home for all-cash or bank financing. Know your repair costs and beware of holding costs, however now is a good time of the year to resell soon. If the comps in the same park are as strong as you say then the risk is certainly reduced.

I hope this all helps and makes sense some. If you have any follow up questions or concerns don't hesitate to comment back for us all to help. If you move forward with the deal please keep us all in the loop.

Thanks for the shout-out, Jeffery.

All the best,
John Fedro

Hi Chad,

Great to hear from you again. Thanks for reaching out. Glad you're in the field aiming to help local park managers and local sellers in and around your area. Great job reaching out and asking for more help with regards to these questions.

I'm sure all these folks will have some good information for you too. I look forward to reading these responses as well.

Do these mobile homes have to be removed from the park? If you are able to rehab the mobile homes and leave them in their current location this would be ideal as you will not have to pay for the homes to be removed and transported, also the park will keep these homes inside their walls so that you may continue paying lot rent monthly.

As an active mobile home investor you will be bringing a lot of value to the closing table besides $250-$1000. I'm not sure how long these homes have been sitting vacant however you will be taking them as is, closing quickly, keeping the homes in the park, advertising these homes to attract a good deal of foot traffic through the park that may help sell other homes, and also attract good buyers that will bring up the value of this community. I have no idea what these homes look like however I would encourage you to try to purchase them for us close to zero dollars as possible, ideally with 3 to 6 months free lot rent. I hope this all helps and makes sense. Additionally, please do not think that these are "pie-in-the-sky" deals or terms. In an above sentence I mentioned "as investors we bring a lot of value to the closing table besides cash" and I meant that, be confident that you are able to fix these homes and increase revenue within this local mobile home community. With this said you have to be aware of how much you can resell these homes for each. Depending on the sizes, ages, conditions, and demand, the price and terms will very when you resell them.

If you do have to move the homes then this changes things considerably. Depending on the ages of the homes and the condition they may or may not be allowed to be transported or moved to some or any parks within your area. Some/Few local mobile home parks may pay for the entire move and set up of these mobile homes however if they are older mobile homes the parks may not even want them in their communities. I hope this helps and makes sense. There's definitely a lot more due diligence to consider however you are certainly on the right track with regards to helping others.

Keep in touch and let me know your thoughts concerning the advice above. Again there are a lot of variables that I do not know about concerning these homes. I hope that my words and advice have at least pointed you in the right direction. All the best.

Talk soon,
John Fedro

Congratulations, Austin! Great looking pictures. Thanks for posting all this and sharing the details. Great job again. You deserve all the credit and rewards. This is the first of many. :)

Talk soon,
John Fedro

Hi Jason,

Thanks for reaching out. This was really thoughful of you. Yes, I am investing in the OKC and surrounding markets. Feel free to PM me. Keep in touch.

Talk soon,
John

Hi Reginald,

Thanks for commenting and reaching out with your questions. I'll be happy to answer questions where I can. I had to chuckle a bit at your statement that you are finally seeing that mobile homes and SFRs are two different types of real estate animals. With that said please see my thoughts below in bold.

1. Do I need to use a Purchase & Sales agreement? The answer to this question is, "it depends". If you're purchasing a mobile home in a pre-existing park than a purchase and sale agreement is not needed as the sale will take place in the next couple days most likely. If the mobile home is attached to real property than I would suggest you do have a purchase and sale agreement signed as this closing will typically take 15 days to 30 days to close, and you could also record this agreement in public record to cloud the title if needed. If not, where do I list the terms of the deal? Concerning a mobile home in a park, the terms of the deal will be listed in the paperwork you provide at closing. If you will be making the seller payments then this will likely be outlined on a promissory note of some kind. I hope this helps and makes sense. If you have any other questions regarding these topics never hesitate to reach out again.

2. Do I need another form (assignment of contract) to assign the deal over to my end-buyer? The answer to this question again is, "it depends". However in most cases you should absolutely have an assignment of contract. Please keep in mind that if the mobile home is in a mobile home park than the buyers and sellers can go around you in most cases and undercut you if they would like. Inside mobile home parks it is best to disclose that you will be making a profit to both the buyer and the seller... This is of course only my opinion. Again If not, where do I list the terms of the deal? An assignment of contract and purchase and sale agreement will work just fine.

3. How do I conduct a tile-search on a mobile home and where do I go to get it done? If the mobile home is attached to real property then you will use your local real estate attorney, title agent, or escrow company to issue a title policy/insurance on the home and land. I was told the local DMV, is this true? This depends on the state that you are investing in. In South Carolina you may absolutely call or go down to the Department of Motor Vehicles with the subject property serial number or VIN. You may then ask the clerk if this property has any liens, back taxes, or additional owners you did not know of.

4. Roughly how much should I offer for a 2-bed, 2-bath, 1995 (66 x 14) FLEETWOOD mobile home that needs to be moved? As little as possible to get the deal close. I suggest that almost any mobile home you purchase that is located in a pre-existing park should recoup all of your money back within one year or less after reselling via payments. If your reselling this for all-cash then you should aim to double or triple your money selling it to an end user. Because it sounds like you are looking to wholesale a mobile home, it may be wise for you to contact local mobile home parks and mobile home buyers to see how much they will pay for a hypothetical "1995 two bedroom Fleetwood single wide". I hope this answer does not sound vague... I meant what I said earlier about purchasing the home for as minimal as possible. Depending on the seller's situation, what else is for sale in the park, the time of the year, what your buyers will pay for the home, repairs needed, the park approval process, the park manager, repairs, etc the price and terms you offer a seller will vary from home to home and seller to seller.

5. Condition: Roof leaks in a couple of places, floor around the commode in the master bath is week and sinking, Central HVAC system does not work, mold infestation as a result of the recent SC flood, and the house is full of junk as the seller was a hoarder. A mobile home in this condition sounds like it will scare away many potential buyers that are interested in this property. Additionally, it does not sound with the seller has the money to fix these repairs herself/himself. Depending on the area and sellers motivation you should be able to pick this home up for a relatively inexpensive price. With this said, overpaying for a mobile home AND over improving a mobile home are two big areas where newbie mobile home investors spend too much money. While I can't be too detailed in this comment reply, as I don't know enough information about the home or the seller, I do encourage you to continue asking questions and make sure you will be able to sell this property for a profit. I hope this all helps and makes sense. If you have any questions or concerns never hesitate to reach back out. Were all here to help you. Keep up the great work.

Talk soon,
John Fedro

Hi Jason,

Welcome to the site! There is so much free and useful info here, plus most folks are super nice and open to helping out when you have questions. Keep learning and asking questions. Have a great week. 

Talk soon,
John Fedro

Hi Erika and the group,

Good question.

First let me understand something so we are all on the same page. When you say, "mobile home auction" what exactly do you see in your mind? Are you at a MH park that is auctioning off homes for some reason? Or at the courthouse steps? Or at a bank or deal's lot? Or something else? ... Either way I will be happy to give you some thoughts below.

When dealing with local parks you can get good deals as there are few folks bidding on abandoned homes that likely need work. With that said, there may be a handful or more bidders in very hot markets. Either way the park likely does not want you removing the homes from their park and will not likely sell to you if they know this. Again, I could be wrong and every park is different, however if the home is decent the park will likely want it in their community and they may fight you on this.Besides this issue if and when parks have auctions this can be a good place to pick up homes.

You will likely not be at your local courthouse steps for MHs that are personal property.

If purchasing from a dealer or bank (reo) type auction then by all means there may be something of value to be purchased. I have not found banks to be very negotiable, surprisingly.

Andriy, it depends very much on the lien type; gov't liens stay in most cases. In most areas the Title(s) will not be placed into the new buyer's name until these debts are satisfied.

I hope the words above have been helpful. If I completely missed the mark and did not answer your question fully please don't hesitate to reach out again. All the best.

Talk soon,
John Fedro

Hi John,

Thanks for the follow-up questions for sure. I'll be happy to help. Please see my thoughts in bold below. 

Do you have any experience in purchasing a MH within a MHP which is a Planned Unit Development (PUD)? Yes. This is a vacant 1988 3/2 MH in pretty rough shape which is a listed Homepath property. There is a monthly $20 PUD fee. I am learning more about this space and plan to make some phone calls on Monday. Am I correct in saying that in a non-PUD MHP (or traditional MHP) I would own the MH if I were to buy it and then pay the MHP owner lot rent. Correct. Whereas with a MHP-PUD situation (PUD, private road, or co-op style MHP) I would be buying not only the MH but also the land on which the MH sits? This depends on the community and may/will vary from community to community. Some communities give ownership of "a share" in the common interest of the land, or perhaps the actual land under which the mobile home sits, or another variation of ownership. I say this because MHs typically can't get conventional financing whereas this MH had a mortgage on it as Fannie Mae now has it in its possession. Thus a mortgage with conventional financing must have been placed on the MH and on the land on which it sits. Again, the answer is "it depends". There are programs that provide FHA financing to MHs inside communitites, providing the communitites meet certain FHA requirements. Here is a bit more info http://portal.hud.gov/hudportal/HUD?src=/program_o.... With that said I am certainly no lending expert or know the previosuly mentioned requirements. I only bring this up to mention that even though it is financed this home may have the land included or may not. You will know much more when you reach out to the sellers and ask some in-depth questions. I presume then that I would be responsible for the property taxes in the PUD situation? In most situations you are perfectly correct, however this also varies a bit from state to state, and of course if the land is owned by you as well. Do you steer clear of MHPs which are PUDs? Not at all. They can be very good. If the home is a good deal, the community/area is solid, and the seller is ready to sell I will certainly try to help them, add value, and make a profit if possible. I encourage you to do the same if possible. Do you have any experience in buying Homepath MHs? This I do not have any experience with. Sorry about that. I hope this all helps some and points you in the right direction. Keep in touch with any questions or future concerns. Keep us all posted if you move forward with this lead.

Additioanlly, thank you Andriy for pointing out John's questions to me.

Best,
John Fedro

Welcome Augustine,

Great job gaining the courage to come this far. Keep asking questions and poking around on this great site.

Stay active,
John Fedro