All Forum Posts by: John Hall

@John Hall Congrats on getting the deal! 

Are there any mobile home investors in your area that you could ask for help? I have helped a number of parks in my area to help renovate vacant homes. Typically, I will sign a storage agreement with the park that has a list of required repairs to bring the homes up to "park standards"(see below). I will do any repair for a park as long as the numbers work.... Just make sure the investor has a good reputation, and will keep the home in the park. 

I did cabinets 2 different ways.  Craigslist usually has several sets of cabinets that have been taken out of homes for a remodel, that various owners want to sell.  I bought a huge kitchen set of cabinets, taken out of a nice home,  for $1000.  I used the cabinets and did 2 + trailers with them.  They were nice, 15 year old 3/4" plywood boxes with hardwood faces.  MUCH better than the 1/2 particle board boxes in the trailers.  We got a little creative putting them together and outfitted the kitchens and bathrooms.

In the other trailers, I made new boxes out of 3/4" plywood and new faces out of hardwood.  It ain't rocket surgery.  3 youtube videos and a 1/2 case of beer (not around the power tools), and you can be a cabinet maker.  Again, I have the tools and the know-how.  My manager (not a carpenter) and I did an entire trailer, including countertops in a weekend, for about $400.  He had to finish them with a nice semi-gloss paint, after the weekend.    We used sanded plywood on the ends so they looked nice when painted.  For the boxes, we used standard ole plywood; $32/sheet.  If you don't have a table saw, get your cut list together, (which you absolutely want to do to save on materials) you can even have Home Depot, or Lowes, or others cut them for you.  (careful, they aren't the most accurate so have them cut them 1/4" oversized and then cut them with your skill saw (with a new blade) and a straight edge.)  Viola', you have cabinets. 

Buy the pre-fab countertops, up to 12' long, at HD or Lowes, and put them in.

My cabinets look nice, are sturdy, and other than a door getting torn off, aren't going anywhere soon.

@John Hall

It is cost prohibitive to switch out MHs like that unless you basically can't rehab the MH.  Not to mention you take on additional risk with transporting the MHs in and out of the park. We always rehab our MHs unless there isn't another option.

Out of curiousity have you gotten multiple bids on the renovations? 10k for each would be high for my market unless they are absolutely trashed.

As for the game plan, after renovation our typical plan is to seller finance the mobile homes so we aren't responsible for any more repairs and a park that is on lot rent only is generally more desirable for resell.  Should try to get at least 1k down, but this amount can vary depending on your market.

Hope that helps!

John,

I had a similar (albeit smaller) situation on my hands when I bought my first park 3 years ago.  6 homes, all rented when I bought it, and all vacant a month later due to issues similar to what you described.  I too had the decision to remodel or replace as they were all in rough shape.  I opted to remodel 4 of them, and demolish 2.  As it turns out, I should have remodeled 3 of them and demolished 3.  I am a contractor, know what I'm doing, and did a lot of the work myself.  

Whatever you do, make sure you don't bring new trailers, or spend so much on remodels that you price yourself out of your rental market.  I have the most expensive trailers in my area averaging about $475/month including lot rent and no utilities.  I can get this rent because I did a nice job remodeling and I now have the nicest trailers in the area.  I have people wanting to move in all the time so vacancy is never an issue.

When it was all said and done, and what I'm moving forward with on my next larger park that I close on in two weeks, if I have to spend much more than about $6,000 on the remodel; I'm selling/demolishing and bringing in a new trailer.  In my area, I can find a newer, nicer trailer (takes some looking around and negotiating) for about the same money.  $4,500 +/- to move it in, put new decks/stairs on it, replace flooring, paint, and misc repairs.  I'm in it $10-12k, and can rent it all day for $475 a month.  I have also sold 2 of them, but since I did the repairs, and now know how their built, I have very little maintenance.

The one remodel I did, that I'm in about $12k, I would never do again.  Its still an old trailer; lipstick  on a pig. 

I found a local guy that did the demo/removals for nothing.  He is a Scrapper and he saved the old flooring, HVAC units, toilets, steel frames, etc.  We both won.  It took a couple of months for him to get rid of the trailers, but that was fine with me.  (We split the dumpster fees for the unusable stuff, about $300/trailer.)

2 year pay-out, happy tenants, low turnover, low maintenance, high demand.  Town LOVES me because I turned a dump into a nice little family park.  

I would be happy to discuss more with you if you like. 

@John Hall what area are you in?

I personally would repair the homes (for as cheap as possible), fill the vacancies using RTO, charge $1000 down/deposit to have them with skin in the game, and strictly/consistently enforce park rules and No Pay No Stay.